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.

---

Definitions:

Nonunion Committees

Groups formed within workplaces that are not affiliated with any labor union, often focusing on employee welfare and workplace issues.

Over-Empowered

Describes a situation or person having too much power or authority, leading to potential misuse or imbalance in a system or relationship.

Representative Employees

Workers chosen or elected to voice the concerns and interests of their colleagues during negotiations or in discussions with management.

Noncontroversial Issues

Noncontroversial issues refer to topics or matters that generally do not evoke strong disagreements or opposition, often allowing for easier consensus or discussion.