Answered: Explain opportunity costs (implicit…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Explain opportunity costs (implicit costs) in investment decisions.

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From an organizational perspective, investment decisions are all about how well the funds are invested across different assets. The main objective of every investment decision is to derive maximum return in the long run. One of the important aspect in an organizations investment decision is opportunity cost.

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