Suppose the New York Rangers can rent out Madison Square Garden (the arena where they play hockey) to American Hockey League (AHL) affiliates for $11,000 per game. The $11,000 per game is the _____ cost of capital.
A)implicit opportunity
B)explicit financial
C)direct
D)total

Question

Quizplus · Accepted Answer

The $11,000 per game represents the implicit opportunity cost of capital because it is the foregone income the New York Rangers could have earned by renting out Madison Square Garden to AHL affiliates instead of using it themselves.

Suppose the New York Rangers Can Rent Out Madison Square