The cost of a resource that may be relevant to an investment decision even when no cash changes hand is called a(an):
A)sunk cost.
B)opportunity cost.
C)depreciation cost.
D)average cost.

Question

Quizplus · Accepted Answer

Opportunity cost refers to the cost of the next best alternative foregone. It is relevant in investment decisions as it helps in assessing the trade-offs between different options. This cost may not involve any cash outflow but could still have a significant impact on the investment decision. Sunk cost, depreciation cost, and average cost are all different types of costs but may not be relevant in all investment decisions.

The Cost of a Resource That May Be Relevant to an Investment