1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Kisachek [45]
3 years ago
15

Which of the following is NOT a relevant cash flow and thus should not be reflected in the analysis of a capital budgeting proje

ct?
A. Changes in net working capital.B. Shipping and installation costs.
C. Cannibalization effects.
D. Opportunity costs.
E. Sunk costs that have been expensed for tax purposes.
Business
1 answer:
IgorLugansk [536]3 years ago
8 0

Answer:

E. Sunk Costs that have been expensed for tax purposes

Explanation:

A relevant casf flow is a future cashflow that arises as direct consequence of a decison. A cost or revenue is cosidered to be relevant cash flow to a decision if it satisfies all of the following three (3) conditions:

  1. Future: A decision is a choice step of action to be taken in the future. Therefore no cost or revenue should be recognised until the action  is taken. Costs that have been incurred in the past prior to the decision should not be considered and are therefore not relevant. They are called sunk cost. Sunk costs are not relevant costs.
  2. Cash-based: items of expenditures  that do not result in the movement of cash should not be considered. e,g depreciation, amortization, provisions, e.t.c
  3. Must arise as a direct consequence of a decision. Also, only costs and benefits associated to decision should be included and consider as relevant. i.e incremental costs and benefits

Opportunity cost: the is the value of the next best benefit sacrificed in favour of a decision. Where taking a decision would lead to a loss of benefits The lost  benefits are therefore costs to be charged to the decision.

Cannibalization Effects. This occurs where the introduction of a new product by a firm causes a loss of sales and profits from the the existing product line. The loss of sales is an opportunity cost to be charged to the new product.

You might be interested in
What are the job training/education requirements for being a judge?
jasenka [17]
You will need a law degree
6 0
3 years ago
Dave and his partner are studying the strengths and weaknesses of their construction business, Ajax Construction, as well as res
jenyasd209 [6]

Answer:

SWOT Analysis.

Explanation:

Dave and his partner are studying the strengths and weaknesses of their construction business, Ajax Construction, as well as researching the opportunities and threats in the external environment. Dave and his partner are conducting a SWOT analysis. In SWOT analysis, we analyse our strengths and weaknesses, which comes from inside and we evaluate outside environment which can pose opportunities and threats on us. SWOT analysis is one the basic tool which can tell us what needs to be corrected and where we have to perform better and what segments we should serve, what new product we should enter in our portfolio. It also tell us what business we could be in and what business we should be in.

5 0
3 years ago
A customer, who needs to drive to work in a Wisconsin winter, has a critical need to use the product Ice Melt. For him as a cons
Blizzard [7]

Answer:

Urgency / Postponement leads to customer inelastic demand of ice melt.

Explanation:

Elasticity of demand is responsive change in demand of good, due to change in price. Formula = % change in demand / % change in price

Factors Affecting Price Elasticity of Demand : Nature of commodity, Income, substitutes availability, time period, urgency / postponement, share in total expenditure,

Inelastic Demand is when demand responds proportionately less to price change. % change in demand < % change in price

Case 'Customer critically needs ice melt to drive to work' : This has inelastic demand i.e demand less respondent to price changes (he will buy that at high price too). Such because of the urgency of this demand & less scope of its postponement.

5 0
3 years ago
​Zane's Vanes is a service that restores old weather vanes. Zane has just spent​ $125 purchasing a​ 1920s-era weather vane which
VladimirAG [237]

Answer:

The marginal benefit from selling the vane without restoring it is $200.

Explanation:

Marginal benefits are the extra income a company can get from selling one additional unit of production.

Zane had already spent $250 in purchasing the vane and the restoration process.

Zane has two options:

  1. Sell the vane as it is for $200.
  2. Keep restoring the vane, spend $200 more and sell the vane for $500.

If Zane decides to sell the vane as it is, his marginal benefit will be $200. That would not be enough to cover his costs, this transaction will result in a $50 loss.

If Zane decides to continue the restoration, then his marginal costs will be $200 extra, but his marginal benefit would be $500. If he chose this option he could end up earning a $50 profit.

8 0
3 years ago
Dave owns 15 shares of ABC mining stock. on monday the value of each shares rose $2 but on tuesday the value fell $5. what is th
IgorC [24]
First, the value of each share rose by 2. So we have +2.

Then it fell by 5. So we have
2 - 5 = -3

Each share has a net value of negative 3.
Dave owns 15 shares. So,
15 * (-3) = -45.
So, there is a net loss of $45.
8 0
2 years ago
Other questions:
  • Marvin, the CEO of Flexus Inc, believes in sharing problems faced by the company with his employees. He prefers getting ideas an
    8·1 answer
  • The fact that the words 'whiskey makes you sick when you're well', when arranged differently, 'whiskey, when you're sick, makes
    15·2 answers
  • A government bond with a coupon rate of 5% makes semiannual coupon payments on January 7 and July 7 of each year. The Wall Stree
    11·1 answer
  • Sometimes compensation packages include bonuses designed to provide performance incentives to employees. The difficulty a bonus
    15·1 answer
  • Oreo Corporation has accumulated E&amp;P of $8,000 at the beginning of the current year. During the year (a nonleap year), the c
    8·1 answer
  • The Lighthouse Co. is in a downsizing mode. The company paid a $2.50 annual dividend last year. The company has announced plans
    9·1 answer
  • John is the owner of the restaurant, The Round. He decides to increase employee motivation by introducing benefit packages. Howe
    15·1 answer
  • Darwin Inc.sells a particular textbook for $24. Variable expenses are $16 per book. At the current volume of 52,000 books sold p
    11·1 answer
  • 291. Much of the hope for continued improvement of the economy lies in the projection of increasing consumer spending this year.
    15·1 answer
  • A special kind of imperfectly competitive market that has only two firms is called.
    11·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!