Which of the Following Costs Are Never Relevant in the Decision-Making

question 29

Multiple Choice

Which of the following costs are never relevant in the decision-making process?

• A)fixed costs
• B)historical costs
• C)relevant costs
• D)variable costs
• E)opportunity costs

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Definitions:

Simple Rate

Simple Rate often refers to a straightforward percentage or rate applied in calculations without complications such as tiering or compounding.

New Machine

Refers to the acquisition of a new piece of equipment or machinery intended to increase productivity or efficiency in a manufacturing or operational process.

Payback Period

The amount of time it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment.

Investment

The allocation of resources, such as capital, time, and effort, in something to earn a return or achieve a goal.