Which of the Following Statements Is CORRECT

question 8

Multiple Choice

Which of the following statements is CORRECT?

• A) An example of a sunk cost is the cost associated with restoring the site of a strip mine once the ore has been depleted.
• B) Sunk costs must be considered if the IRR method is used but not if the firm relies on the NPV method.
• C) A good example of a sunk cost is a situation where a bank opens a new office, and that new office leads to a decline in deposits of the bank's other offices.
• D) A good example of a sunk cost is money that a banking corporation spent last year to investigate the site for a new office, then expensed that cost for tax purposes, and now is deciding whether to go forward with the project.
• E) If sunk costs are considered and reflected in a project's cash flows, then the project's calculated NPV will be higher than it otherwise would be.

Know how to adapt and tailor requests to specific audiences and situations.

Grasp the significance of maintaining a professional tone throughout the message.

Understand the appropriate openings for different types of routine requests.

Distinguish between simple and complex requests and identify when further justification is required.

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Definitions:

Anchoring and Adjustment

A cognitive bias in decision-making where an initial piece of information (the anchor) heavily influences subsequent judgments and adjustments.

Availability Bias

A cognitive bias that influences decisions based on the immediate examples that come to a person's mind.

Negotiation

A process of discussing issues openly and attempting to reach a joint decision or agreement.

Risk-Averse

The tendency to prefer avoiding losses over achieving equivalent gains.