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IMANET Exam CMA Topic 1 Question 14 Discussion
Actual exam question for
IMANET's
Certified Management Accountant exam
Question #: 14
Topic #: 1
[All Certified Management Accountant Questions]
Topic #: 1
The maximum benefit forgone by using a scarce resource for a given purpose and not for the next-best alternative is called?
Suggested Answer:
A
An opportunity cost is the maximum benefit forgone by using a scarce resource for a given purpose and not for the next-best alternative. In capital budgeting, the most basic application of this concept is the desire to place the company's limited funds in the most promising capital project(s).
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