Which cost would be regarded as an implicit cost
A)the cost of accounting services
B)the opportunity cost of financial capital that has been invested in the business
C)the cost of compliance with government regulation
D)all costs that involve outlays of money by the firm

Question

Quizplus · Accepted Answer

Implicit costs are not monetary costs, but rather represent the value of sacrificed alternatives. The opportunity cost of financial capital invested in the business is an example of an implicit cost because it represents the value of the alternative uses for that capital, not the actual outlay of money. The other options listed are all explicit costs, which involve actual outlays of money by the firm.

Which Cost Would Be Regarded as an Implicit Cost