Question

The rate that is used to discount expected future cash flows can be thought of as the return

the investor is forgoing on an alternative investment of equal risk. In this framework, the
discount rate is being thought of as which of the following?
A. Net present value
B. Opportunity cost
C. Closing cost
D. Future value

Answer 1

B. Opportunity cost

Step-by-step explanation:

Opportunity cost -

It refers to the benefits which the company , business or an individual don't receive because of choosing some other option is referred to as opportunity cost .

The financial reports do not reflect the opportunity cost , and hence in most of the time is overlooked .

Opportunity cost can even lead to bottlenecks .

Hence , from the given information of the question ,

The correct answer is B. Opportunity cost .