When calculating ROI and RI under the opportunity cost principle the:
A) original cost is used as the investment base.
B) written-down value is used as the investment base.
C) market 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

When calculating ROI and RI under the opportunity cost principle, the market value should be used as the investment base. This is because the opportunity cost principle takes into account the potential return that could have been obtained by investing in a different opportunity, and the market value reflects the current value of the asset in the marketplace. Using the original cost or written-down value may not accurately reflect the current value of the asset or the potential return that could be obtained by investing in a different opportunity.

When Calculating ROI and RI Under the Opportunity Cost Principle