Opportunity costs are classified as sunk costs in project analysis. A sunk cost is a cost that has already occurred and cannot be recovered in the future. Sunk costs are costs that have already occurred and will remain the same regardless of the outcome of a decision-making; hence, they should not be addressed in capital budgeting.
Sunk costs are easy to get hung up on, especially when they are explicit costs. Direct payments paid to people in the course of running a business, such as labor, rent, and materials, are examples of explicit costs. Explicit costs that have already been incurred are sunk and no longer influence future decision-making.
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Answer:
Simple structure depends on owner supervision to look after the all activities that performed during the task.
Explanation:
Simple structure depends on owner supervision to look after the all activities that performed during the task. Therefore it become sometimes more difficult to look on every activities and this become more critical and complex when company grows.
it is very simple design in any business. as in case of small business where owner itself act as manager to operate all activities at his/her level
Answer:
6.64%
Explanation:
The pretax cost of debt is the Yield to Maturity (YTM). Since the coupons are paid semiannually, adjust the duration and the coupon payment amount to semi-annual terms.
You can solve for the YTM using a financial calculator with the following inputs;
Maturity of the bond; N = 20*2 = 40
Face value ; FV = 1000
Semi-annual coupon payment ; PMT = (7%/2)*1000 = 35
Current price of the bond; PV = -1.04*1000 = -1040
Then compute the semiannual interest rate ; CPT I/Y = 3.318%
Therefore, pretax cost of debt; YTM = 3.318 *2 = 6.64%
Many plans have a low monthly contribution requirement
Answer: Advertisement is a marketing communication. It is used to promote businesses and their products. Used to promote more effectiveness in a businesses profit and their sales. May be seen in the form of commercials or billboard announcements in everyday life.
