A Company Is Considering a New Project That Will Cost

question 83

Multiple Choice

A company is considering a new project that will cost $19,000.This project would result in additional annual revenues of $6,000 for the next five years.The $19,000 cost is an example of a(n) :

• A) Sunk cost
• B) Fixed cost
• C) Incremental cost
• D) Uncontrollable cost
• E) Opportunity cost

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Definitions:

Dependent Variable

In an experiment or model, it is the variable being tested and measured, which is expected to change as a result of changes in the independent variable(s).

Independent Variable

A variable in an experiment or statistical model that is manipulated or controlled by the experimenter to observe its effect on a dependent variable.

SSE

Sum of Squared Errors; a measure of the discrepancy between the data and an estimation model.

SST

Sum of Squared Total, a measure used in statistics to quantify the variance within a set of observations.