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Question

An opportunity cost does not involve ___________.

A
Cash Outlays
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B
Direct Cost
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C
Indirect Cost
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D
None of the Above
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Solution

The correct option is A Cash Outlays
Opportunity cost refers to a benefit that a person could have received but gave up to take another course of action. It is the cost most relevant for two mutually exclusive events. It does not involve any cash outflow.

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