Define Opportunity Cost

question 26

Essay

Define opportunity cost. Given the definition of opportunity cost, explain what is meant by the statement "There is no such thing as a free lunch."

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Definitions:

Bottom-Up Budgeting

A budgeting process where the budget is prepared with the input and estimates coming from lower-level staff, before being aggregated and approved at higher levels.

Operating Budgets

A financial plan that estimates the expected income and expenses for a specific period in the future, often used to guide business activities.

Continuous Budgets

Budgets that are regularly updated by adding a new period as the current period is completed, facilitating constant financial planning.

Sales Budget

A financial plan that estimates the expected revenue from sales over a specific period, guiding business strategies and operations.