Which of the Following Is Not Considered a Relevant Concern

question 31

Multiple Choice

Which of the following is not considered a relevant concern in deter- mining incremental cash flows for a new product?

• A) The use of factory floor space which is currently unused but available for production of any product.
• B) Revenues from the existing product that would be lost as a result of some customers switching to the new product.
• C) Shipping and installation costs associated with preparing the machine to be used to produce the new product.
• D) The cost of a product analysis completed in the previous tax year and specific to the new product.
• E) None of the above. (All are relevant concerns in estimating relevant cash flows attributable to a new-product project.)

---

Definitions:

Random Elements

Unpredictable factors that can affect outcomes in various systems or processes, often incorporated into models and decision-making to account for uncertainty.

Policy Changes

Refers to modifications or adjustments made to existing rules, regulations, or guidelines within an organization, institution, or government.

Real-Life System

Refers to complex, operational systems that function in the real world, often encompassing human, technological, and environmental components.

Time-Consuming

Activities or processes that require a significant amount of time to complete, often implying inefficiency or labor intensity.