A Business Owner Has to Decide Whether the Company Should

question 30

Multiple Choice

A business owner has to decide whether the company should purchase new manufacturing equipment,open a new retail store in another city,or invest in a major advertising campaign.The value of the most appealing alternative that the business owner did not choose is its ________.

• A) break-even value
• B) decisional value
• C) opportunity cost
• D) factor analysis determination
• E) resource value

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Definitions:

Land Ownership

The legal right to possess, use, and manage a piece of land.

Compound Interest

The accumulation of money that builds over time in an investment or interest-bearing account as new interest is earned on previous interest that is not withdrawn.

Savings Account

A deposit in a commercial bank or thrift institution on which interest payments are received; generally used for saving rather than daily transactions; a component of the M2 money supply.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.