The Basic Capital Budgeting Principles Involved in Determining After-Tax Incremental

question 165

Multiple Choice

The basic capital budgeting principles involved in determining after-tax incremental operating cash flows require us to:

• A)include sunk costs, but ignore opportunity costs.
• B)include opportunity costs, but ignore sunk costs.
• C)ignore both opportunity costs and sunk costs.
• D)include both opportunity and sunk costs.

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Definitions:

Management by Objectives

A method of performance management in which managers collaborate with their employees to establish, track, and accomplish distinct goals.

Business Operations

The day-to-day activities involved in running a business, including production, sales, and administration.

Business Opportunities

Potential economic activities or ventures that can lead to profitability and growth.

Management by Objectives

A performance management approach where managers and employees work together to set, monitor, and achieve specific objectives.