All future costs are relevant in decision making.” Do you agree? Explain.

Q: What is the Economic Value Added (EVA) method? Provide a definition, state a formula, and define all…

A: Economic Value Added (EVA): EVA also called economic profit is a measure of the financial…

Q: Define then discuss Value-at-Risk.

A: The stock market is full of new policies and procedures. It get impacted by change in the government…

Q: a. What is the IRR of cach alternative? b. What is the present value of costs of cach alternative?…

A: Capital budgeting is a technique that is used widely by companies to evaluate projects to make the…

Q: Label each of the following statements as either true (“T”) or false (“F”). An opportunity cost is…

A: Answer:   True.

Q: All future costs are relevant in decision making. O True O False

A: When we make decision-making, we consider the differential between the costs and the opportunity…

Q: Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on…

A: The costs that have already been incurred are known as Sunk costs. A sunk cost will not change…

Q: Explain what is Make-or-Buy Decision?

A: Decision making: It is a vital capacity in the management, since decision making is identified with…

Q: “Sunk costs are easy to spot—they’re the fixed costs associated with a decision.” Do you agree?…

A: The Sunk cost is a cost which has been incurred in the past and cannot be recovered and revoked back…

Q: What is meant by relevant costs and there use in making short-term decisions?

A: Cost refers to the amount of expenditure incurred by an individual or an entity in relation to goods…

Q: Explain present value, future value, and opportunity cost.  Give an example of each concept.

A: Present value:It is the value at which the current sum of money in difference to some future value…

Q: Discuss cost-benefit analysis and financial analysis tools

A: Answer: Cost-benefit analysis: It is nothing but a process of decision making that balances the…

Q: For the reader's advantage, provide a cost-benefit analysis of the project. How can the value of a…

A: An analysis is a systematic procedure used by businesses to determine which decisions to make and…

Q: how present value is useful in economic decision making

A: Present value (PV) is the current value of a future sum of money or a stream of cash flows, given a…

Q: Future costs that differ across alternatives are: a. Opportunity costsb. Sunk costsc. Relevant…

A: Costs are the amount of expenditures that are made in the business for the purpose of production or…

Q: “Relevant costs for pricing decisions are full costs of the product.” Do you agree? Explain.

A: Pricing Decisions:Pricing decisions are those decisions that are related to ascertain the price of a…

Q: How can we illustrate Settlement Costs?

A: A cost is a monetary value that is incurred by the company to acquire something or to produce…

Q: How does opportunity cost enter into a make or buy decision?

A: Opportunity Cost:   Opportunity Cost is the future capacity or potential advantage that can be…

Q: The costs most relevant to be used in decision making are: a. sunk costs O b. current costs O c.…

A: Cost: It implies to the expense that is incurred on the manufacturing of a product or rendering…

Q: How can we calculate the Total Present Cost for the Base Case and Alternative?

A: The question is based on the concept of calculation of cost benefit analysis of base case and…

Q: Think of two [ of your ] real life examples about objective principleThink of two [ of your ] real…

A: Objective principle: The objective principle states that all the accounting information should be…

Q: Identify at least two (2) irrelevant costs in a make vs buy decision

A: Irrelevant costs are those costs that do not change if any of the alternatives are selected between…

Q: Label each of the following statements as either true (“T”) or false (“F”). A sunk cost will change…

A: Sunk cost: It can be defined as an expense that has already been paid for and cannot be recovered in…

Q: Explain Make-or-Buy Decision?

A: Meaning:  It is a decision which is made to either manufature a product or service in house ( by…

Q: payback period, NPV, and IRR always lead to the same decision? Why or why not? If not, which one…

A: Step 1   One of the most essential choices a business owner or management will ever make is capital…

Q: Beside the dollar cost, what other costs should you consider when comparing alternative solutions to…

A: There could be lot of factors which are to be considered while comparing alternative solutions to a…

Q: the conceptual framework includes which constraint a.prudence b. conservatism c. cost d all of…

A: IASB is the accounting standard body which is known as International Accounting Standards Board.…

Q: Calculate the total relevant cost. Do you agree with the president's conclusion?

A: Note: Allocated facility level cost is a fixed cost; hence it is not taken into consideration.

Q: Give two examples of sunk costs, and explain why they are irrelevant in decision making.

A:

Q: Understand how fixedand variable costs behave andhow to use them to predictcosts.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Future costs that do not differ among the alternatives are not relevant in a decision. True or False…

A: A expense that is anticipated to be incurred in the future is referred to as a future cost. It is…

Q: Define opportunity cost

A: Opportunity costs represent the benefits an individual, investor or business misses out onwhen…

Q: “All future costs are relevant.” Do you agree? Why?

A: Future cost: The cost that is expected to be incurred on the investment by the company in the future…

Q: A project will be preferred when it has:

A: Payback period is the time period in which the investment will pay its initial cost back. The…

Q: How do you calculate Benefit Cost Ratio (BCR). Mention the decision making process of BCR

A: The present value of the benefit is divided by the cost and investment in order to calculate the…

Q: Outline the rules for identifying the optimal transfer price.

A: Transfer pricing:- Transfer pricing is considered as the value that is attached to those goods and…

Q: How can we determine the equivalent benefits as well as the equivalent costs.?

A: The annual cost of an asset maintenance before the replacement cost arises is known as equivalent…

Q: Which of the following terms is used to refer to opportunities that are practical and physically…

A: The answer and the explanation has been given in the next step.

Q: “All future costs are relevant in decision making.” Do you agree? Why?

A:

Q: Outline any problems you are aware of associated with the discounting of future costs and benefits…

A: The discounting of future cost means that because that will be incurred in future and discounted…