A retailer assigns a return on investment of 10 percent on the value of its company-owned warehouse.This illustrates which concept?
A) asset turnover
B) incremental budgeting
C) opportunity costs
D) prototype store

Question

Quizplus · Accepted Answer

Assigning a return on investment to a company-owned asset, like a warehouse, illustrates the concept of opportunity costs. This is because the retailer is considering the potential earnings or benefits that could be generated if the asset were used in a different way or invested elsewhere, rather than its current use.

A Retailer Assigns a Return on Investment of 10 Percent