A Small Business Owner Is Planning to Purchase a New

question 39

Multiple Choice

A small business owner is planning to purchase a new office computer for $1,000. The opportunity cost of purchasing this computer is:

• A)$900
• B)$1,000
• C)$1,100
• D)Unknown, since we do not know the owner's next best alternative.

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Definitions:

Liabilities

Financial obligations or debts that a company or individual owes, which are recorded on the balance sheet and must be settled over time.

Assets

Resources with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

Subsidiary Corporation

A corporation wholly owned by another corporation (the parent corporation).

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.