Which of the Following Is Not True Regarding the Determination

question 128

Multiple Choice

Which of the following is not true regarding the determination of relevant costs and relevant revenues associated with quality-related initiatives (such as the move to JIT production) ?

• A) Relevant costs are defined as future costs that differ between and among decision alternatives.
• B) Relevant costs exclude opportunity costs since these costs are not normally recorded by accounting systems.
• C) Relevant costs include all "avoidable" costs.
• D) Long-term effects of relevant costs and relevant revenues are usually assessed using discounted cash flow (DCF) capital budgeting decision models.
• E) Relevant revenues could include the contribution margin associated with increased sales (because of decreased cycle times associated with JIT).

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Definitions:

Leveraged Buyout (LBO)

A financial transaction where a company is purchased with a combination of equity and significant amounts of borrowed money, using the company's assets as collateral.

Junk Bonds

Bonds with high risk but also a high rate of return.

Tender Offer

A public offer by a suitor to buy voting stock.

SEC

The SEC, or Securities and Exchange Commission, is a U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry, including stock and options exchanges.