What is an Opportunity Cost?

Multiple Choice

• A cost that only occured in the past.

• The cost of choosing one option over another.

• Any negative cash flow in the terminal year of a project.

What is an opportunity Cost? Multiple Choice A cost that only occured in the past. The cost of choosing one option over another. 0 Any negative cash flow in the terminal year of a project. Company X has decided to sell an asset for $100,000. It bought the asset for $200,000, and as of the time of sale, it had taken total accumulated depreciation charges of $50,000 on that assets. Assuming a tax rate of 30%, what is the after-tax cash flow on the sale of the asset? Multiple Choice $115,000 $100,000 O $85,000 O $50,000 $150,000 Which capital budgeting decision-making method should be used for short-term projects in which the company does not want to have to calculate the required rate of return? Multiple Choice Net Present Value Payback Period Internal Rate of Return True of False: If a project's Base Case Net Present Value is positive, it should proceed with sensitivity and scenario analysis, but if the Base Case NPV is negative, it should reject the project. Multiple Choice True False When there is no interest expense (or when it is being ignored), Operating Cash Flow can be calculated by adding what together? Multiple Choice Net Income and Depreciation Net Income and EBIT Variable and Fixed Costs Sales and Variable Costs