A Project's Opportunity Cost of Capital Is

question 54

Multiple Choice

A Project's opportunity cost of capital is:

• A)the forgone return from investing in the project.
• B)the return earned by investing in the project.
• C)equal to the average return on all company projects.
• D)designed to be less than the project's IRR.

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Definitions:

Monopolist

A single seller in a market, who has significant control over the price and supply of a specific good or service.

Marginal Cost

The increase in total cost resulting from producing one additional unit of a good or service.

Price Discriminate

A pricing strategy where a seller charges different prices for the same product or service to different customers, based not on costs, but on willingness to pay.

Economic Profit

The separation between overall turnover and cumulative costs, incorporating both direct and indirect expenditures.