The potential benefits lost by taking a specific action when two or more alternative choices are available is known as a(n):

A. Out-of-pocket cost.
B. Differential cost.
C. Sunk cost.
D. Alternative cost.
E. Opportunity cost.


Answer: E

Business

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Ollie Company entered into a lease agreement with Costello, Inc, to lease an asset that cost Ollie $120,000 . The lease agreement requires five annual year-end rentals of $40,000 each. Ollie's implicit rate on the lease is 1 . percent. Ollie's dealer profit on this lease would be

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Business