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MBA 702 : Module 2 Exam Questions And
Answers |Latest 2025 | Guaranteed Pass
Pertinent Opportunity Cost - Answer✔Existing Market Value of a Resource
Example of Pertinent Opportunity Cost - Answer✔Buying jet fuel for $2M at start of year
Option to sell that same jet fuel at $2.5M today
2 Ways to NOT UTILIZE Input Capabilities - Answer✔1. Abstain from initial procurement of
these capabilities
2. Resell unused capabilities with the open market
Economic Cost Accrued - Answer✔Embodies cumulative sum of all its expenses over a certain
interval of time (Encompasses any pertinent opportunity costs endured over the duration)
Ex) True Cost of Owner Operators = (Accounting Cost + Owner's Labor Services' Opportunity
Cost)
Economic Profit - Answer✔Variance between its overall revenue throughout that interval and
its economic cost
Ex) True Cost of Owner Operators = (Revenue - Cash Expenses - Opportunity Cost)
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Cost of Capital (CC) - Answer✔Result of forgoing an Opportunity Costs of a Decision (Typically
expressed as a %)
Ex) Alternative option yielding 8% annually
Annual Capital Cost (Annualized) - Answer✔$$ Amount Loan * interest % (CC) = $$/Yr
Net Present Value Analysis - Answer✔PV = (PPP) / ((1+t)^t)
PV - Answer✔Present Value
Per-Period Profit (PPP) - Answer✔Present Value of a Cashflow
"in t-Years, the principal + interest equals PPP"
"t" - Answer✔Years from the present
"i" - Answer✔interest rate (Cost of Capital)
PV of Profits Received over a Period of Years - Answer✔Sum of the Present Values of the
Individual Sums
Net Present Value (NPV) - Answer✔Present Value of the Cashflows the investment generates,
Less (cost of the investment)
Perpetuity - Answer✔a cashflow (e.g. PPP) received each yr forever
2|Page
MBA 702 : Module 2 Exam Questions And
Answers |Latest 2025 | Guaranteed Pass
Pertinent Opportunity Cost - Answer✔Existing Market Value of a Resource
Example of Pertinent Opportunity Cost - Answer✔Buying jet fuel for $2M at start of year
Option to sell that same jet fuel at $2.5M today
2 Ways to NOT UTILIZE Input Capabilities - Answer✔1. Abstain from initial procurement of
these capabilities
2. Resell unused capabilities with the open market
Economic Cost Accrued - Answer✔Embodies cumulative sum of all its expenses over a certain
interval of time (Encompasses any pertinent opportunity costs endured over the duration)
Ex) True Cost of Owner Operators = (Accounting Cost + Owner's Labor Services' Opportunity
Cost)
Economic Profit - Answer✔Variance between its overall revenue throughout that interval and
its economic cost
Ex) True Cost of Owner Operators = (Revenue - Cash Expenses - Opportunity Cost)
1|Page
, ©THEBRIGHT 2025 ALL RIGHTS RESERVED 4:52 PM A+
Cost of Capital (CC) - Answer✔Result of forgoing an Opportunity Costs of a Decision (Typically
expressed as a %)
Ex) Alternative option yielding 8% annually
Annual Capital Cost (Annualized) - Answer✔$$ Amount Loan * interest % (CC) = $$/Yr
Net Present Value Analysis - Answer✔PV = (PPP) / ((1+t)^t)
PV - Answer✔Present Value
Per-Period Profit (PPP) - Answer✔Present Value of a Cashflow
"in t-Years, the principal + interest equals PPP"
"t" - Answer✔Years from the present
"i" - Answer✔interest rate (Cost of Capital)
PV of Profits Received over a Period of Years - Answer✔Sum of the Present Values of the
Individual Sums
Net Present Value (NPV) - Answer✔Present Value of the Cashflows the investment generates,
Less (cost of the investment)
Perpetuity - Answer✔a cashflow (e.g. PPP) received each yr forever
2|Page
