1. The option that is forgone so that an asset can be utilized by a specific project is referred to as which one of the following?
Salvage value.
Wasted value.
Sunk cost.
Opportunity cost.
Erosion.
2. If the required return from an asset is 10.9 % and the asset has a 62 % probability of yielding a 19 % return and a 38 % probability of earning a 4.2 % return. Which investment activity should you? make? ?(Select the best choice? below.)
A. You should purchase the assets since the expected return exceeds the required return.
B. You should purchase the assets since the required return exceeds the expected return.
C. You should not purchase the assets since the expected return exceeds the required return.
D. You should not purchase the assets since the required return exceeds the expected return.