Which of the Following Costs Are Always Relevant for Decision

question 97

Multiple Choice

Which of the following costs are always relevant for decision making?

• A) Sunk costs and differential costs
• B) Opportunity costs and sunk costs
• C) Differential costs and fixed costs
• D) Opportunity costs and differential costs

---

Definitions:

Rising Rate

An increasing trend in interest or inflation rates over a certain period.

Maturity Value

The amount to be paid to the holder of a financial instrument at the end of its term, including the principal and any accumulated interest or dividends.

Compounded Semi-annually

A method of calculating interest where the interest is added to the principal twice a year.

Strip Bond

A type of bond investment where the coupon payments and the principal are separated and sold individually as zero-coupon instruments.