Question

1. The amount of income that would result from an alternative use of cash is called opportunity cost.

A. True
B. False
2. When a segment of a company is showing a net loss, it is always best to discontinue the segment in order not to continue with losses.
A. True
B. False

Answer 1

Answer: 1. True

2. False

Step-by-step explanation:

1. Opportunity cost simply means the cost of what we've to forgo for something else. It's the amount of income which would be gotten when we use cash in an alternative way. Therefore, the answer is true.

2. A net loss occurs when the expenses are more than the income for a given period of time. Rather than discontinuing, it's required for a disclose to be made based on the rules, Therefore, the correct answer is false.