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What is opportunity cost rate?
The opportunity cost rate is the rate of return you could earn on an alternative investment of similar risk.
Opportunity cost of holding money?
The opportunity cost of holding money is the nominal interest rate.
Is the opportunity cost rate a single number used in all situations?
No, the opportunity cost does not rate a single number that is used in all situations.
Is an investment an implicit cost?
Yes, investment is an implicit cost because it is a firm investing their own money in something that (by definition of an opportunity cost) could have been invested in something else. Investment is the opportunity cost of a firm using their own money, and whether or not the opportunity that the firm invested in is worthwhile is defined by the NROR (the normal rate of return).
What is the opportunity cost to a fully employed economy of increasing capital investment?
A fall in consumption
What is shadow wage rate?
Shadow wage is the opportunity cost of labour, used in cost benefit analysis.
What is opportunity cost rate?
The opportunity cost rate is the rate of return you could earn on an alternative investment of similar risk.
Opportunity cost of holding money?
The opportunity cost of holding money is the nominal interest rate.
Is the opportunity cost rate a single number used in all situations?
No, the opportunity cost does not rate a single number that is used in all situations.
In case of internally generated funds the opportunity cost to the firm is?
lendind rate
Is an investment an implicit cost?
Yes, investment is an implicit cost because it is a firm investing their own money in something that (by definition of an opportunity cost) could have been invested in something else. Investment is the opportunity cost of a firm using their own money, and whether or not the opportunity that the firm invested in is worthwhile is defined by the NROR (the normal rate of return).
What is the opportunity cost to a fully employed economy of increasing capital investment?
A fall in consumption
Why market price of share differ from book value?
market value is based on demand for the asset, whereas book value is based off the asset's depreciation rate (BV= cost - accumulated deperciation) which is determined by useful life and salvage value. (cost-salvage rate/life)
What are synonyms of the word value?
rate, price, cost, charge, amount, expense
How does a fall in the real interest rate affect consumption decisions?
The interest rate is basically the price of money. The main concept behind the interest rate when thinking about consumption decisions is opportunity cost. In terms of the household, if the interest rate is high the opportunity cost of consumption is high because the rate of return for investing is high. Prospectively, the household could have much more purchasing power if the household would invest rather than consume. If there is a higher interest rate consumption will probably go down as more people will invest more because the returns to investment will be higher. It will depend on if the household values consumption now more than consumption later, if the goods and services they need at the present is worth more than how much they will receive in the future through investment. If the interest rate is low the opportunity cost of consumption is low because the rate of return for investing is low. There will be very little value lost to consumption now because the household will get very little from investing when there is a low interest rate.
Explain why retained earnings have an associated opportunity cost?
Retained earnings have an opportunity cost associated with them because they can be invested to earn more rather than keeping them idle. For example reatined earnings can be invested in a savings account in a bank and earn interest but if this is not done the are loosing some extra income and so if they are invested somewhere else, the bank rate will be the opportunity that has been lost. Opportunity cost is the real cost of choosing one thing and not another.
What is the formula for the rate of written down value method?
R=1- n√scrap value/original cost x100
