CFA Practice Question

There are 233 practice questions for this study session.

CFA Practice Question

Which of the following is least likely classified as an opportunity cost?
A. The cash flows generated by an old machine that is to be replaced
B. The cash savings related to adopting a new production process
C. The market value of vacant land to be used for a distribution center
Explanation: The cash savings related to adopting a new production process is an incremental cash flow, not an opportunity cost.

User Contributed Comments 2

User Comment
nmech1984 why not A? I did not fully get it..
PASSCFAxxx Regarding A, you have to choose between replacing the old machine and the cash flows it generates. Therefore, it's is an opportunity cost
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