Under the opportunity cost principle,when calculating ROI and RI
A)market value is used as the investment base
B)original cost is used as the investment base
C)written down value is used as the investment base
D)none of the options would be used when calculating ROI and RI under the opportunity cost principle.

Question

Quizplus · Accepted Answer

The opportunity cost principle considers the return on investment that could have been earned by investing the same amount in an alternative opportunity. Therefore, the market value of the investment should be used as the investment base, as it represents the current value of the investment and the potential return that could be earned by investing in other opportunities. The original cost or written down value may not accurately reflect the current value of the investment and the potential return on investment.

Under the Opportunity Cost Principle,when Calculating ROI and RI