For a Cost or Revenue to Be Relevant to a Particular

question 28

Multiple Choice

For a cost or revenue to be relevant to a particular decision, the cost or revenue must

• A)differ between the alternatives being considered.
• B)be a past cost.
• C)be a future cost.
• D)Both a and c above are correct.

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Definitions:

Investment

The allocation of resources, such as capital or time, with the expectation of generating a future return.

Present Value

The current value of a future amount of money, calculated using a specific interest rate to account for the time value of money.

Annual Cash Operating Costs

Refers to the total amount of cash expenditures that a business incurs within one year to maintain its operations excluding non-cash expenses.

New Bus

A recently manufactured bus, not previously used or owned, often equipped with the latest features and technology.