A project's opportunity cost of capital is:
A) the foregone 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 refers to the return that an investor could have earned if they had invested their money in an alternative investment with similar risk. Therefore, it is the foregone return from investing in the project.

A Project's Opportunity Cost of Capital Is