That Which We Forgo, or Give Up, When We Make

question 82

Multiple Choice

That which we forgo, or give up, when we make a choice or decision is called

• A) out-of-pocket cost.
• B) marginal cost.
• C) real cost.
• D) opportunity cost.

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Definitions:

Discount Rate

In finance, the interest rate used to discount future cash flows of a financial instrument to present value, reflecting the opportunity cost of capital.

Payments

The act of transferring money or value from one party to another in exchange for goods, services, or to fulfill a legal obligation.

Years

Units of time measuring 365 days (or 366 in a leap year), often used to track age, duration, or periods of investment.

Effective Annual Rate

The interest rate on a loan or financial product restated on an annual basis, accounting for compounding over the term.