The Term "Opportunity" in Opportunity Cost of Capital Comes from the Fact

question 45

True/False

The term "opportunity" in opportunity cost of capital comes from the fact that any worthwhile opportunity for investment will have a cost: the risk to the capital invested.

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Definitions:

Journal Entry

A record in accounting that notes the details of a financial transaction in a company’s financial systems.

Raw Materials

Basic materials that are used in the production process to manufacture goods, often transformed or converted into the finished product.

Journal Entry

A record in the books of account that represents a transaction and its effect on the accounts, typically including a debit and credit.

Period Costs

Costs not directly linked to manufacturing and are charged as expenses when they occur, including sales, general, and administrative costs.