The Opportunity Cost of a Resource Should Be Considered in Project

question 68

Multiple Choice

The opportunity cost of a resource should be considered in project analysis, unless:

• A)no cash flows result from its use.
• B)the resource was purchased in a prior time period.
• C)the resource has been fully depreciated.
• D)the resource has no identifiable market value.

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Definitions:

Similarity To Other Situations

The degree to which a current scenario or issue replicates the aspects or conditions of a different situation previously encountered.

Confirmation Error

A cognitive bias involving the tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses.

Decision Already Made

Decision already made refers to situations where a conclusion or resolution has been reached before discussing or presenting it to others, often making subsequent deliberations or inputs appear redundant.

Circular-Flow Diagram

A visual model that shows how goods, services, and money move through the economy in a circular manner between households and firms.