A Sunk Cost Is One That

question 304

Multiple Choice

A sunk cost is one that

• A)changes as the level of output changes in the short run.
• B)was paid in the past and will not change regardless of the present decision.
• C)should determine the rational course of action in the future.
• D)has the most impact on profit-making decisions.

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Definitions:

Accounts Receivable Turnover

A financial ratio that measures how effectively a company manages credit extended to its customers by calculating the number of times receivables are collected during a period.