If a firm finances the purchase of an asset with cash, then it has zero financial cost to the firm.

Name: If a firm finances the purchase of an asset with cash, then it has zero financial cost to the firm.
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Question

Quizplus · Accepted Answer

Even when a firm finances the purchase of an asset with cash, there is an opportunity cost of not investing that cash in other projects or investments that could generate a financial return. Therefore, there is still a financial cost to the firm in terms of foregone opportunities.

If a Firm Finances the Purchase of an Asset with Cash