The opportunity cost of investment refers to:

Question

Quizplus · Accepted Answer

Opportunity cost refers to the benefits foregone as a result of choosing one investment opportunity over another. In this case, the opportunity cost of investment is the capital that could have been invested elsewhere in the company's activities instead of being tied up by inventory. This is because investing in inventory ties up capital that could have been used for other productive activities in the company. Therefore, option A is correct. Option B refers to quantity discounts rather than opportunity costs, while option C and D refer to losses rather than opportunity costs.

The Opportunity Cost of Investment Refers To