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:

Cannibalize

In business, refers to a situation where a company's new product or service takes away sales from its existing offerings.

Highly Innovative

Refers to organizations or individuals that exhibit a strong capacity for creativity, leading to groundbreaking ideas and products.

Mission Statements

Formal summaries of the aims and values of a company, organization, or individual, guiding its decision-making and path forward.

Organizational Goals

The objectives or desired outcomes that an organization aims to achieve over a specific period, guiding its strategic decisions and actions.