Question

Cost which does not involve cash outlay, is called

Answer 1

The costs which do not involve cash outlay are called the implicit costs.

These costs actually state the earnings which a resource would earn if put to a second best alternative use.

Though the implicit rents and wages are not considered while accounting for business gains and losses, they are very important to access whether the factor should remain in its present occupation.

Answer 2

The costs which do not involve cash outlay are called the implicit costs.

These costs actually state the earnings which a resource would earn if put to a second best alternative use.

Though the implicit rents and wages are not considered while accounting for business gains and losses, they are very important to access whether the factor should remain in its present occupation.