When Making Choices, Suppliers Should Not Allow Sunk Costs to Directly

question 99

Multiple Choice

When making choices, suppliers should not allow sunk costs to directly affect their current decisions because

• A) sunk costs do not reflect foregone opportunities accompanying current choices.
• B) sunk costs will not influence the accounting costs of a firm.
• C) sunk costs influence the demand for products, not the supply.
• D) past choices fail to provide any information relevant to current decision making.

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Definitions:

Corporate-Level Strategy

The top-level strategic planning and decision-making that guides the overall direction, scope, and ambitions of a corporation.

Competing Business Opportunities

Different prospects or avenues through which a business can grow or expand in the market, often requiring prioritization and strategic choice.

Product Life Cycles

The stages through which a product passes from its development to eventual withdrawal from the market, including introduction, growth, maturity, and decline.

Adjusting Strategy

The process of modifying business strategies in response to changes in the internal or external environment.