Which of the following statements regarding opportunity costs is true?
A)Opportunity costs are recorded as an expense since they are a cost of accepting another option.
B)Opportunity costs are always incremental.
C)Opportunity costs are unavoidable.
D)The same decision will be reached whether or not opportunity costs are considered in an incremental analysis.

Question

Quizplus · Accepted Answer

Opportunity costs represent the benefits an individual, investor, or business misses out on when choosing one alternative over another. These costs, while not recorded in the financial statements, are relevant for decision-making and are indeed incremental as they vary depending on the choice made between alternatives.

Which of the Following Statements Regarding Opportunity Costs Is True