Assume your firm has an unused machine that originally cost $75,000,has a book value of $20,000,and a market value of $25,000.Ignoring taxes,what is the opportunity cost of using this machine?
A) $75,000
B) $25,000
C) $20,000
D) $5,000

Question

Quizplus · Accepted Answer

The opportunity cost is the market value of the machine, which is $25,000, as it represents the amount you could receive if you sold the machine instead of using it.

Assume Your Firm Has an Unused Machine That Originally Cost