Multiple choice

Interest on capital is an example of

  1. sunk cost

  2. committed cost

  3. imputed cost

  4. future cost
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 Imputed cost is the cost which are considered only for the purpose of decision making and performance evaluation. In interest on capital no actual cash payment is made, but the concept is that had the funds been invested elsewhere they would have earned interest.

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