The foregone value associated with the current rather than next-best use of a given asset is called:

Question

Quizplus · Accepted Answer

Opportunity cost is the cost incurred by choosing one option over the next best alternative. It is the value foregone by not choosing the next best alternative. Therefore, D is the correct answer. Current cost refers to the cost of replacing or reproducing an asset at the current market price. Replacement cost is the cost of replacing or reproducing an asset at its original cost. Historical cost refers to the cost of an asset when it was acquired or purchased. None of these terms directly refer to the foregone value associated with the current rather than next-best use of a given asset.

The Foregone Value Associated with the Current Rather Than Next-Best