The Highest Valued Alternative That Must Be Given Up in Order

question 181

Multiple Choice

The highest valued alternative that must be given up in order to choose an action is called its

• A) opportunity cost.
• B) utility.
• C) scarcity.
• D) ceteris paribus.

---

Definitions:

Initial Investment

The initial amount of money required to start a project, investment, or business, often used to assess its feasibility and potential return.

Negative Cash Flow

A situation where a business or individual's outflows of cash exceed their incoming cash, indicating potential financial trouble.

Modified Internal Rate of Return (MIRR)

A financial metric that measures the profitability of an investment, taking into account the cost of capital and the reinvestment of cash flows.

Net Present Value (NPV)

A financial metric that calculates the value of a projected investment by estimating the present value of its future cash flows minus the initial investment cost.