Which of the Following Is NOT a Relevant Factor When

question 27

Multiple Choice

Which of the following is NOT a relevant factor when determining incremental cash flows for a new product?

• A) the land that would be used for the new project could be sold to another firm.
• B) revenues from an existing product that would be lost as a result of customers switching to the new product.
• C) shipping and installation costs associated with preparing a machine that would be used to produce the new product.
• D) the cost of a marketing study that was completed last year related to the new product. This research led to the tentative decision to go ahead with the new product, and the cost of the research was expensed for tax purposes last year.

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Definitions:

Dummy Variables

Variables used in regression analysis to represent subgroups of the sample in a binary form.

Grade Point Average

An average score representing the academic performance of a student, calculated from the grades obtained in their courses.

Indicator Variables

Dummy variables used in regression models to encode categorical data into numbers, typically 0 or 1, to include them in statistical analysis.

Number of Hours

The total count of hours measured in a given context, often referring to the duration of events or the amount of time spent on activities.