Consider a firm making a decision to purchase a unit of capital - let's say,a forklift.In terms of capital markets,which of the following would we consider to be the opportunity cost of the forklift?

Question

Quizplus · Accepted Answer

The opportunity cost of purchasing the forklift would be the interest that the firm could earn by investing in a bond instead. This is because the firm could have earned interest on the money used to purchase the forklift if it had chosen to invest it in a bond instead.

Consider a Firm Making a Decision to Purchase a Unit