📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    âš¡ Month End Offer - Flat 52% Off On All Courses! Enroll Now âš¡
    00:00:00 AM Left

    Question

    Which of the following is a measure of the discount

    factor used to appraise capital investment decisions?
    A LIBOR rate Correct Answer Incorrect Answer
    B The current inflation rate Correct Answer Incorrect Answer
    C The current G-sec rate Correct Answer Incorrect Answer
    D The opportunity cost of capital of business Correct Answer Incorrect Answer
    E The opportunity cost of capital of all businesses in the same industry Correct Answer Incorrect Answer

    Solution

    Opportunity cost is the potential loss from a missed opportunity—the result of choosing one alternative and forgoing another. For example, the opportunity cost of holding money rather than buying bonds or some other interest-bearing asset is the nominal interest that would otherwise be earned.

    Practice Next
    More Alternate Sources of Finance Questions
    ask-question