Samia Has Decided That with the Two Hours in Between

question 22

Multiple Choice

Samia has decided that with the two hours in between classes she can do one of 3 things. She has ranked her choices, from highest to lowest as, (1) chat with her friends, (2) study economics or (3) take a nap. The opportunity cost of chatting with her friends is

• A) the combined value of studying economics and taking a nap.
• B) the value of studying economics, the next best use of time.
• C) the value of chatting with her friends.
• D) zero since she does not pay her friends to talk to her.

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Definitions:

Decision Usefulness

The quality of financial information that helps users make informed decisions regarding investment, credit, and similar activities.

General Objective

The overarching, broad goal that guides decision making and strategy within an organization or project.

Derived External User Objective

A goal or requirement for financial information that is created based on the needs of external users of financial statements.

Derived Company Objective

Strategic goals or intentions that are developed based on an analysis of a company's environment and internal capabilities.