Which of the following is most likely to be an implicit cost for Company X?
A)forgone rent from the building owned and used by Company X
B)rental payments on IBM equipment
C)payments for raw materials purchased from Company Y
D)transportation costs paid to a nearby trucking firm

Question

Quizplus · Accepted Answer

Implicit costs are those not directly paid out in cash but represent opportunities foregone by using resources in a particular way. Forgone rent from the building owned and used by Company X is an implicit cost because it represents the income the company could have earned if it had rented out the building instead of using it for its own operations.

Which of the Following Is Most Likely to Be an Implicit