WebApr 7, 2024 · In rational decision-making, sunk costs should not play a role in our future actions because we can never get back the money, time, or energy we have invested—regardless of the outcome. Instead of considering the present and future costs and benefits, we remain fixated on our past investments and let them guide our decisions. WebSunk costs Opportunity costs Differential costs Avoidable costs 2. LO 10.1 Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making? avoidable costs unavoidable costs sunk costs differential costs 3.
What Are Relevant Costs? Make the Right Business Decisions
WebA sunk cost is a cost that has already been spent but is not recoverable in any case, and future business decisions should not be affected by past spending. Spending on research, equipment, or machinery buying, rent, payroll, marketing, or … crossword ndtv
Costs that differ between alternatives are _____. a. relevant to the ...
WebSunk cost refers to a cost that has already been incurred and cannot be recovered. It is a past expense that is irrelevant to current and future decisions. This means a sunk cost … WebA cost that cannot be avoided or changed because it arises from a past decision, and is irrelevant to future decisions, is called a (n): (a) Uncontrollable cost (b) Incremental cost... WebMar 8, 2024 · Relevant costs are critical to making the right choices because financial planning involves identifying future cash flows linked to a particular decision. Past costs (sunk costs) have no role in this type of decision making, and disregarding them reduces the amount of information you need to consider. crossword necessary