"Mr Stone, I Must Say You Are Making a Mistake

question 40

Multiple Choice

"Mr. Stone, I must say you are making a mistake. I know you have spent $6,000 on research and development to develop this project, but that money must not be used as a negative cash flow of the project." Apparently, Mr. Stone does not understand the concept of:

• A)side-effect costs.
• B)opportunity costs.
• C)sunk costs.
• D)variable costs.
• E)depreciation not taken.

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Definitions:

Social Security

A government program that provides financial assistance to people with inadequate or no income, especially the elderly, disabled, and families with dependent children.