Consider a Firm Making a Decision to Purchase a Unit

question 91

Multiple Choice

Consider a firm making a decision to purchase a unit of capital - let's say,a forklift.In terms of capital markets,which of the following would we consider to be the opportunity cost of the forklift?

• A)the future stream of MRPs from the forklift
• B)the resale value of the forklift after one year
• C)the additional revenue to the firm that the forklift would generate in the future
• D)the purchase price of the forklift
• E)the interest the firm could earn by purchasing a bond instead

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Definitions:

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