An opportunity cost must be included in the cash flow estimate when using a resource requires foregoing real or potential alternative income, even though no cash is spent to obtain the resource.

Question

Quizplus · Accepted Answer

An opportunity cost refers to the potential benefit that could have been gained from an alternative use of a resource. This cost must be considered as a relevant cash flow in financial analysis, even if no actual cash is spent.

An Opportunity Cost Must Be Included in the Cash Flow