Cash flows that could be realised from the best alternative use of an owned asset are called
A) incremental costs.
B) lost resale opportunities.
C) sunk costs.
D) opportunity costs.

Question

Quizplus · Accepted Answer

The cash flows that could be realized from the best alternative use of an owned asset are known as opportunity costs. These costs represent the benefits that are foregone by choosing one option over another. It is important for decision-makers to identify and consider opportunity costs when comparing different options to make the best decision. A, B, and C are not correct answers as they refer to different types of costs.

Cash Flows That Could Be Realised from the Best Alternative