An Example of a Personal Opportunity Cost Would Be

question 43

Multiple Choice

An example of a personal opportunity cost would be:

• A)lost wages due to continuing as a full time student
• B)higher earnings on savings that must be kept on deposit a minimum of six months.
• C)time comparing several brands of personal computers
• D)Interest lost by using savings to make a purchase
• E)having to pay a tax penalty due to not having enough withheld from your monthly salary.

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Definitions:

Hurdle Rate

The project cost of capital, or discount rate. It is both the rate used in discounting future cash flows in the net present value method and the rate that is compared to the internal rate of return.

Intrinsic Value

The actual value of a company, asset, or currency determined through fundamental analysis without reference to its market value.

Risk-Adjusted

Pertaining to the modification of financial analysis or return on an investment to account for the risk involved, ensuring a more accurate assessment of performance or value.

Preferred Stock

Preferred Stock is a class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often entitling holders to fixed dividends but with limited or no voting rights.