Which of the following is true of opportunity costs?
A)Not included in initial cash flow
B)Must be estimated and included in the cash flows of the project
C)Similar to sunk costs
D)Should be ignored by the firm
E)Similar to fixed costs

Question

Quizplus · Accepted Answer

Opportunity costs must be estimated and included in the cash flows of the project as they represent the cost of the best alternative forgone in order to pursue the project. Therefore, they should be considered in decision-making.

Which of the Following Is True of Opportunity Costs