Costs That Require a Monetary Payment Are Known as _____

question 17

Multiple Choice

Costs that require a monetary payment are known as _____ costs.

• A) implicit
• B) explicit
• C) finance
• D) economic

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing potential benefits missed.

Differential Revenue

The additional revenue that is generated from choosing one alternative over another in decision-making processes.

Differential Analysis

The process of comparing the financial differences between alternative business decisions or scenarios, focusing on costs and benefits that change between options.

Differential Cost

The difference in cost between two alternative decisions or changes in output levels.