The opportunity cost of a firm using its own capital is
A) economic depreciation.
B) self ownership depreciation.
C) economic loss.
D) normal loss.
E) capital loss.

Question

Quizplus · Accepted Answer

The opportunity cost of a firm using its own capital is the economic depreciation, which refers to the decrease in the value of the capital over time due to wear and tear, obsolescence, or other factors. This cost represents the foregone alternative use of the capital if it were invested elsewhere or used for other purposes.

The Opportunity Cost of a Firm Using Its Own Capital