Barb's Aunt Gave Her $100 for Her Birthday with the Condition

question 71

Multiple Choice

Barb's aunt gave her $100 for her birthday with the condition that Barb buy herself something.In deciding how to spend the money,Barb narrows her options down to four choices: Option A,Option B,Option C,and Option D.Each option costs $100.Finally she decides on Option B.The opportunity cost of this decision is

• A)the value to Barb of the option she would have chosen had Option B not been available.
• B)the value to Barb of Options A,C and D combined.
• C)the average of the values to Barb of Options A,C,and D.
• D)$100.

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Definitions:

Fiscal Year

A one-year period used for financial reporting and budgeting that does not necessarily coincide with the calendar year, varying between organizations.

Times Interest Earned

A ratio measuring a company's ability to meet its interest payments based on its operating income, indicating financial health and creditworthiness.

Tax Rate

The percentage at which an individual or corporation is taxed.

Bonds Payable

Long-term debt securities issued by a corporation or government entity, which must be repaid to investors at a specified maturity date.