Opportunity costs represent the cash flows directly associated with the production and transfer of the products and services.

Question

Quizplus · Accepted Answer

Opportunity costs represent the cost of the forgone alternative, which is not necessarily a cash flow associated with production and transfer of products and services. It represents the foregone benefits of the next best alternative forgone due to the choice of a particular option.

Opportunity Costs Represent the Cash Flows Directly Associated with the Production