GM decides to build a new plant using retained earnings. All of the following are true except

Question

Quizplus · Accepted Answer

The statement that GM is avoiding experiencing opportunity costs is incorrect. When GM decides to use retained earnings to build a new plant, it is choosing to invest in a specific project instead of other potential investments. This decision inherently involves opportunity costs, which are the benefits the company foregoes by not investing the retained earnings elsewhere.

GM Decides to Build a New Plant Using Retained Earnings