When a Company Is Outsourcing a Process, Resources Are Freed

question 1

Multiple Choice

When a company is outsourcing a process, resources are freed up so they can be put to another use.The alternative use is considered to be

• A)an opportunity cost.
• B)a sunk cost.
• C)an outsource windfall.
• D)a fixed cost.

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Definitions:

Financial Year

A one-year period that companies use for accounting purposes and preparation of financial statements, which may or may not align with the calendar year.

Expensed

Costs or expenditures that are immediately charged against earnings in the period in which they are incurred, rather than being capitalized or deferred.

Intangible Asset

An asset that lacks physical substance but is identifiable and provides future economic benefits, such as patents or trademarks.

Fair Value

An estimate of the market value of an asset or liability, which reflects the price at which an orderly transaction would take place between market participants at the measurement date.