A Cost Is Not Relevant for Decision Making If It

question 103

Multiple Choice

A cost is not relevant for decision making if it:

• A) Does not differ for each option available to the decision maker.
• B) Changes from period to period.
• C) Is a future cost.
• D) Is a mixed cost.
• E) Is a fixed cost.

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Definitions:

Pollution

The presence in or introduction into the environment of a substance or thing that has harmful or poisonous effects.

External Benefit

A positive effect experienced by unrelated third parties resulting from a transaction or activity.

Subsidizing

The act of a government or organization providing financial support to reduce the cost of goods or services, often to encourage production or consumption.

External Benefit

A benefit that affects parties other than the buyers or sellers involved in a transaction, similar to a positive externality.