A cost beyond the initial capital Investment.
Answer to Problem 1QTC
There are few more costs beyond the initial capital investment like
Explanation of Solution
Given information:
A clothing manufacturer is considering using RFID tags to track all the new season’s clothing.
RFID i.e Ratio Frequency identification tags are new development in information technology which helps in tracking and keeping all the details of the goods, inventory or movement with the help of ratio frequencies.
While considering use of RFID tracks firms need to evaluate the associated cost and benefits as well .the cost of use of RFID is the opportunity coast of investment if RFID, operational cost of RFID, while benefits are decrease in inventory losses, real time tracking of inventory, saving of time, etc.
Conclusion:
There are few more costs beyond the initial capital investment like opportunity cost, compounding cost related to time value of money, management cost etc.
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Chapter 7 Solutions
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