Mark Is an Engineer Who Has Designed a Telecommunications Device

question 152

Multiple Choice

Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device.
-Mark purchased a machine two years ago to make experimental boards.The machine will be used to manufacture the new board.The cost of this machine is:

• A) an opportunity cost
• B) a sunk cost
• C) a differential cost
• D) a period cost

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Definitions:

Promissory Estoppel

An equitable doctrine that protects those who foreseeably and reasonably rely on the promises of others by enforcing such promises when enforcement is necessary to avoid injustice, even though one or more of the elements normally required for an enforceable agreement is absent.

Merchants

Individuals or businesses engaged in the trade of goods, services, or commodities for profit.

Nonmerchants

Individuals or entities that do not regularly engage in selling goods or services and therefore may not be held to the same standards as merchants in commercial transactions.

UCC

stands for Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.