The Opportunity Cost of an Asset

question 87

Multiple Choice

The opportunity cost of an asset:

• A) should be depreciated annually.
• B) should be included in the project cash flows.
• C) is typically ignored in capital budgeting.
• D) is important only for parcels of land.

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Definitions:

Exculpatory Agreement

A contract that frees one party from liability for wrongful acts or negligence.

Public Policy

Guiding principles and laws adopted by governments aimed at influencing or determining social, economic, and political decisions for the welfare of the public.

Executory Contracts

Contracts under which both parties to the agreement have unfulfilled obligations that remain to be performed.

Repudiated

Refused to accept or be associated with; to reject a proposal, idea, or relationship, often legally or formally.