Which of the Following Is the Most Important Key to Short-Term

question 97

Multiple Choice

Which of the following is the most important key to short-term business decision making?

• A)focus on costs which do not change under two alternatives and on historic costs
• B)focus on qualitative data only and ignore future cash flows
• C)focus on sunk costs and quantitative data
• D)focus on relevant costs and use the contribution margin approach

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Definitions:

Production Possibilities Curve

A graphical representation that shows the maximum quantity of one good that can be produced for every possible level of production of another good, assuming a fixed amount of resources.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision or choosing between options.

Production Possibilities Frontier (PPF)

A curve depicting the maximum output possibilities for two goods, given a set of inputs and technology, illustrating the trade-offs in production choices.

Legal Reform

The process of examining existing laws and making modifications or amendments to improve justice or efficiency.