Besides the dollar cost, what other costs should you consider when comparing alternative solutions to a problem or goal?

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: 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: In economic analysis we want to minimize the difference: (Benefits - Costs).

A: While conducting an economic analysis (cost-benefit analysis) the benefits must weigh greater than…

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: The MARR used for a project’s acceptance or rejection is set relative to what cost?

A: MARR is a discount return which is the lowest rate of return that must be accepted in the project.

Q: Costs that will differ between alternatives and influence the outcome of a decision are

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: Give an example of an irrelevant future cost. Why is it irrelevant?

A:

Q: The potential benefit that is given up when one alternative is selected over another is called O a.…

A: Cost accounting is one of the important branch of accounting, under which all type of costs and…

Q: What factors verify that the project is marginally acceptable?

A: Capital budgeting decisions are generally taken for long-term purposes that are irrevocable.…

Q: Why do most of the engineers prefer Rate of Return Analysis to the PW method?

A: Answer: They would be calculating the present worth of cash flows using a net present value…

Q: If you are to choose between viability and profitability, which one would you choose? Why?

A: A company's viability indicates that it is (or has the potential to be) profitable. A profitable…

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

A: In accounting when it comes to making decisions we classify costs into different types or…

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

A: Sunk cost: Sunk cost is the cost that has been incurred as a result of past events and such cost…

Q: What is interpretation of the usefulness of the contribution margin concept?

A: Contribution margin The additional profit gained for each unit sold is calculated by subtracting the…

Q: What are the two components that can affect the contribution margin? Why is it important to…

A: The two components that can affect contribution margin: 1) Number of units sold. 2) Price / cost per…

Q: Define the term “opportunity cost.” How may this cost be relevant in a make-or-buy decision?

A: Cost is defined as the total amount of money spent by the company for the production or creation of…

Q: Which alternative should be selected? Use a challenger-defender rate of return analysis.

A: Given,  Particulars Projects A($) B($) C($) D($) Initial investment 8500 18500 26500 30000…

Q: The benefit lost when choosing one option precludes receiving the benefits from an alternative…

A: Cost :— The two basic type of Cost incurred by Businesses are Fixed and Variable. Variable Cost…

Q: Why opportunity cost is measured and relate with the evaluation of alternative, can it be an…

A: Cost or expenditure is the total amount spent by an individual, group and company to make a finished…

Q: Why sunk cost should not be considered when evaluating a project?

A: Sunk cost is a cost that has incurred , and which cannot be recovered.

Q: Why can cost benefit analysis be difficult to carry out?

A: Introduction: Cost benefit analysis can be defined as a process which is undertaken by an…

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: 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: How can we use the PW criterion to compare the alternatives to minimize expenditures?

A: The full form of PW is present worth. Present worth is known as the present value of the investment…

Q: Discuss the FOUR basic steps in benefit-cost analysis, which aspect of benefit-cost analysis would…

A: Cost-benefit analysis or CBA is referred to as the prices, which helps in measuring the benefits of…

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

A: INTRODUCTION Relevant costs are the costs which are useful for decision making. It is the costs…

Q: Future costs that do not differ among the alternatives at hand are not relevant in the given…

A: Answer --The statement is TRUE.

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: What is opportunity cost? Select one: O a. It is the cost of the worst opportunity when we choose…

A: Cost: In accounting, the cost is related to monetary value spend on raw material, services, and…

Q: which investment vehicle is better

A: Investment vehicles are the ways in which investors can invest and seek to grow their investment…

Q: The potential benefit of one alternative that is lost by choosing another is known as a. An…

A:

Q: What is the present worth equivalent of the machine considered to be the most preferred choice?…

A: Before investing in new projects, profitability of the project is evaluated by using various methods…

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: What are the critical differences between social cost benefit analysis (SCBA) and economic cost…

A: Social Cost Benefit Analysis : Meaning - It tend to analyse operational costs or the project costs…

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: me major part of the The cost-benefit-trade-off problem involves identifying all the activities and…

A: A cost-benefit analysis compares the predicted or estimated costs and benefits (or opportunities)…

Q: Discuss the advantages and disadvantages of the Net present value

A: Net present value is the method of capital budgeting that helps in determining the present value of…

Q: What are sunk costs? Give an example.

A:

Q: When performing a benefit-cost analysis for multiple alternatives, calculate each B/C ratio, rank…

A: Introduction: Cost benefit analysis is generally performed by companies in order to know if the…

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…