Answer:
Option (B) is correct.
Explanation:
A sunk cost is a cost that was already incurred in the past, alternatively we can say that it is a past cost. These are the costs which cannot be recovered in the future.
The examples of the sunk cost is depreciation expenses, salary expenses, maintenance expense etc.
Therefore, it is not considered in the decision making process which will be held in the future
Since, in the given question, the amount of $12,000 was invested eight years ago which is not recovered now. So, we considered this cost as a sunk cost.
Answer:
The answer is:
A - Fixed Cost
B - Mixed Cost
C - Mixed Cost
D - Variable Cost
E - Variable Cost
F - Variable Cost
G - Mixed Cost
H - Fixed Cost
I - Variable Cost
J - Mixed cost
Explanation:
First let's define the terms:.
Fixed cost is a cost that wont change with varying output. Whether an output increases or decreases, it doesn't change.
Variable cost is a cost that changes with output. If output increases, variable cost increases and vice-versa
Mixed cost is also known as semi-variable cost. It has a combination of both fixed and variable costs
A - Fixed Cost
B - Mixed Cost
C - Mixed Cost
D - Variable Cost
E - Variable Cost
F - Variable Cost
G - Mixed Cost
H - Fixed Cost
I - Variable Cost
J - Mixed cost
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Answer:
The given statement is correct
Explanation:
A well-perceived strategy to measure the cost of the capital for a project is 'pure-play'. As indicated by pure-play procedure, a firm faces two kinds of risks, the most significant is financial leverage risk as beta increases due to an increase in financial leverage risk and the second type is an operational risk. If a firm is persuaded to apply the pure-play method for the calculation of the cost of capital, for that, they should utilize the unlevered beta for the organization that is working in the same industry. Therefore, according to this technique, the given explanation is right.
