A Project's opportunity cost of capital is:
A)the forgone return from investing in the project.
B)the return earned by investing in the project.
C)equal to the average return on all company projects.
D)designed to be less than the project's IRR.

Question

Quizplus · Accepted Answer

The opportunity cost of capital is the forgone return from investing in the project. It measures the return that could have been earned if the funds from the project had been invested elsewhere in a project with a similar level of risk.

A Project's Opportunity Cost of Capital Is