--%>

Influence of opportunity costs

How do opportunity costs influence the capital budgeting decision-making procedure?
Opportunity costs reflect the foregone benefits of alternative not selected when a capital budgeting project is chosen. Any decrease in the cash flows of the firm tied to the selection of a new project directly could be part of the opportunity cost value and included in our capital budgeting analysis.

   Related Questions in Finance Basics

  • Q : Bonds and coupon rate Staind, Inc., has

    Staind, Inc., has 8 percent coupon bonds on the market that have 15 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 9 percent, what is the current bond price?

  • Q : How do financial managers compute the

    How do financial managers compute the average tax rate?Average tax rates are calculated through dividing tax dollars paid by earnings before taxes (EBT).

  • Q : Define Appropriations Limit

    Appropriations Limit, State (SAL): The constitutional limit on the expansion of some appropriations from tax proceeds usually set to the level of the previous year's appropriation limit as adjusted for modifications in cost of living

  • Q : Describe the notion of political

    Normal 0 false false

  • Q : Define Price Increase Price Increase :

    Price Increase: Budget adjustment to reflect the inflation factors for particular operating expenses constant with the budget instructions from the Department of Finance.

  • Q : Means of weight in the weighted average

    Normal 0 false false

  • Q : Explain Fiscal Committees Fiscal

    Fiscal Committees: The committees of members in every house of the Legislature which review the fiscal impact of proposed legislation, comprising the Budget Bill. Presently, the fiscal committees comprise the Senate Budget and Fiscal

  • Q : Effect of bank charges discount

    What happens while a bank charges discount interest on a loan? While a bank charges discount interest on a loan the required interest payment is subtracted through the loan proceeds at the time the loan is made. It makes the effective interest

  • Q : Describe factors cause change in

    Normal 0 false false

  • Q : What is Local Assistance Local

    Local Assistance (LA): The character of expenditures prepared for the support of local government or other locally administered actions.