Question

The cost which does not involve any cash outflow is called

Answer 1

$\large \green{ \fcolorbox{gray}{black}{ ☑ \: \textbf{Verified \: answer}}}$

CASH IN FLOW

• It means that cash is going into the company.
• E.g : Receipt of a bank loan, Interest on savings and Investments and Shareholder investments etc

CASH OUT FLOW

• It means cash is going out of the company.
• E.g: Purchase of stock, Raw materials or tools, Wages, Rents and Daily operating expenses, Dividend payments, Income tax etc

Answer 2

Answer:

The cost which does not involve any cash outflow is called Opportunity cost.

Explanation:

Opportunity cost refers to a benefit that a person could have received but gave up to take another course of action. It is the cost most relevant for two mutually exclusive events. It does not involve any cash outflow.

Opportunity cost is the value of the next-best alternative when a decision is made; it's what is given up,” explains Andrea Caceres-Santamaria, senior economic education specialist at the St. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.