The Most Valuable Investment Given Up If an Alternative Investment

question 1

Multiple Choice

The most valuable investment given up if an alternative investment is chosen is a(n) :

• A)sunk cost.
• B)opportunity cost.
• C)salvage value expense.
• D)net working capital expense.
• E)erosion cost.

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Definitions:

Budgeting

The process of creating a plan to spend your money, outlining projected income and expenses over a period.

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, usually expressed as a percentage.

External Funding

Capital that comes from outside an organization, including bank loans, public offerings, or investments from private entities, used to finance operations, growth, or investments.

Assets/Sales Ratio

A financial metric indicating how much assets a company holds per unit of sales revenue.