Which of the Following Statements About the Concept of Opportunity

question 139

Multiple Choice

Which of the following statements about the concept of opportunity cost is true?

• A)The opportunity cost of a decision only includes monetary outlays.
• B)The opportunity cost of a decision is the next best foregone alternative.
• C)Some decisions have zero opportunity cost.
• D)The opportunity cost of a college education is measured by the payments for tuition and books.

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Definitions:

Plowback Ratio

The proportion of earnings retained by a business, rather than distributed to its shareholders as dividends, to reinvest in the core business or to pay debt.

Dividend Policy Decision

The strategy that a company uses to determine the size and timing of its dividends payments to shareholders.

Capital Intensity Ratio

A financial metric that measures the amount of capital needed per dollar of revenue; used to evaluate the investment intensity of a business's operations.

Fixed Asset Turnover Ratio

A financial metric that measures how efficiently a company uses its fixed assets to generate sales, calculated by dividing net sales by average fixed assets.