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r-ruslan [8.4K]
3 years ago
6

When performing capital budgeting, __________ incurred by a project are irrelevant to future investment decisions.

Business
1 answer:
m_a_m_a [10]3 years ago
6 0

Question:

When performing capital budgeting, __________ incurred by a project are irrelevant to future investment decisions.

A) Opportunity costs

B) Depreciation

C) Sunk costs

D) Taxes

Answer:

The correct answer is C) Sunk Costs      

Explanation:

Capital Budgeting is the art (most applicable to corporate persons) of planning expenditure that will be incurred in the future, especially on long term assets.

The reason you cannot factor Sunk Cost into a Capital Budget is because of  its very nature.

Sunk Costs refer to monies for items that have already been expended and can never be recovered. If it can never be recovered and has <u>already</u>  been incurred, it has no role to play in future considerations especially when the purpose of Capital Budgetting is considered.

The primary purpose of a Capital Budget is that it helps to further evaluate the inflow against the outflow of an investment to check whether or not the return is acceptable.

Every other option given in the question above are items that have futuristic qualities.

Cheers

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Answer:

master budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range.

Explanation:

A master budget is a budget that contains an aggregation of smaller level budgets into an overall single budget

A flexible budget is a budget that can be  adjusted based on the activity levels of a firm.

7 0
3 years ago
Chris wants to open a family-oriented restaurant in a thriving suburban area. Chris thinks a sports-based theme and broad menu w
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Answer:

The correct answer is letter "C": competitive barrier.

Explanation:

Competitive barriers represent obstacles for a business to start operations based on what other companies are already providing to the market. The settled companies -competitors- tend to have a preference and market share obtained through years of operations which is a threat for a new company that is looking for attracting consumers.

6 0
3 years ago
Hazelwood Company had beginning inventory of $54,000. During the period the company purchased $109,800 of merchandise. At the en
Ilia_Sergeevich [38]

Answer:

$207000 is the sales revenue for the year.

Explanation:

The given situation is:

Sales Revenue                              100%

Cost Of Goods sold                     <u>  60% </u>

Profit Margin                                  40%

Now we neither have sales revenue figure nor the profit margin figures but we can calculate cost of goods sold from the following formula:

Cost Of Goods Sold = Opening Inventory + Purchases - Closing Inventory

By putting values we have:

Cost Of Goods Sold = $54,000 + $109,800 - $39,600

Cost Of Goods Sold = $124,200

Now cost of goods sold is 60% which means if we want to go at 100% we will divide with the percentage at which we are standing (60%) and multiply with the percentage which we want to calculate (Sales is 100%).

Sales revenue = Cost of goods sold  *    100% / 60%  

Sales revenue = $124200  * 100% / 60%  = $207,000

3 0
3 years ago
In calculating a predetermined overhead rate, a recent trend in automated manufacturing operations is to choose an activity base
iragen [17]

Answer: c. machine hours.

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It is standard practice to relate overhead to the Direct Labor involved in the production of a commodity and since in this case the direct Labor mostly consists of Machines (Automated) then it is best to relate activities to the Machine hours involved instead.

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3 years ago
With a(n) _______, the full amount of the loan is received when the contract is signed, but only the interest is paid over the l
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Answer: Balloon Loan

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The interest falls due and is paid during the life of the loan.  

The principal however, is paid as a balloon payment on the final day of the life of the loan.


6 0
3 years ago
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