The implicit rental rate for capital includes the
A) firm's normal profit.
B) interest income forgone by purchasing the piece of capital equipment.
C) total value of a piece of capital equipment.
D) amount paid for the use of a piece of capital equipment owned by someone else.

Question

Quizplus · Accepted Answer

The implicit rental rate for capital includes the interest income forgone by purchasing the piece of capital equipment, as this represents the opportunity cost of investing funds in capital rather than earning interest on those funds.

The Implicit Rental Rate for Capital Includes the