Opportunity Cost Is the Amount of Increase or Decrease in Cost

question 92

True/False

Opportunity cost is the amount of increase or decrease in cost that would result from the best available alternative to the proposed use of cash or its equivalent.

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Definitions:

Market Interest Rate

The prevailing rate at which borrowers can obtain money from lenders, influenced by supply and demand in the money market.

Store of Value

An asset that can be saved, retrieved, and exchanged at a later time, and is predictably useful when retrieved.

Liquidated

The process of converting assets into cash or other forms of payment, often used in bankruptcy proceedings.

Interest Income

Earnings received from deposit accounts or investments such as bonds, loans where one lends money to someone else in exchange for a return of interest.