Relevant opportunity cost of capital is the return forgone by investing capital in inventory rather than elsewhere.

Question

Quizplus · Accepted Answer

Relevant opportunity cost of capital refers to the return that is forgone by investing capital in one option instead of another. In the context of inventory management, it means that the opportunity cost of capital is the return that could have been earned if the same capital was invested in another opportunity rather than inventory. Thus, option A is correct.

Relevant Opportunity Cost of Capital Is the Return Forgone by Investing