Asked by Victoria Ferguson on Jun 27, 2024
Verified
. A cost that will be incurred regardless of which alternative is selected is not relevant when choosing between the alternatives.
Relevant
Pertaining to information or factors that are applicable and significant to a specific decision or situation.
Alternatives
Different options or strategies considered in decision-making processes or problem-solving situations.
- Differentiate between relevant and irrelevant costs for decision making.
Verified Answer
AJ
Arjun Jai KhannaJun 30, 2024
Final Answer :
True
Explanation :
A cost that does not vary based on the choice of alternative is considered a sunk cost and is not relevant to the decision-making process. Only costs that will differ based on the alternative chosen are relevant.
Learning Objectives
- Differentiate between relevant and irrelevant costs for decision making.
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