Each of the Following Are True of Relevant Information Except

question 180

Multiple Choice

Each of the following are true of relevant information except:

• A) Past costs are helpful when making predictions but not relevant when making decisions
• B) Different alternatives can be compared by examining differences in expected future revenues and expected total future costs
• C) significant past investment amounts are relevant to decision making
• D) Not all future revenues and expenses are relevant

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Definitions:

Price-taker Firm

A firm that has no control over the market price and must accept the prevailing market price for its products.

Marginal Revenue

The extra revenue generated by the sale of an additional unit of a product or service.

Marginal Cost

The cost of producing one additional unit of a product or service.

Average Variable Cost

The total variable expenses divided by the number of units produced, representing the variable cost per unit.