The Rationale for Not Including Sunk Costs in Capital Budgeting

question 44

Multiple Choice

The rationale for not including sunk costs in capital budgeting decisions is that they:

• A)Are usually small in magnitude
• B)Revert at the end of the investment
• C)Have no incremental effect
• D)Reduce the estimated NPV

Understand and calculate consumer surplus.

Recognize the role of price in consumer demand and surplus.

Apply concepts of utility to analyze consumer demand schedules.

Grasp the principle of diminishing marginal utility.

---

Definitions:

Breast Cancer

A form of cancer that develops from breast tissue, signified by the growth of malignant cells.

Oral Contraceptives

Medications taken by mouth to prevent pregnancy, containing hormones that inhibit ovulation, alter the cervical mucus, or change the uterine lining.

Late-Onset Breast Cancer

Refers to breast cancer diagnosed typically after the age of 60, indicating its occurrence later in life as opposed to early or premenopausal onset.

Biologically Aggressive

Describes behavior or tendencies that are innately driven towards aggression due to biological factors.