A Cost That Cannot Be Avoided or Changed Because It

question 58

Multiple Choice

A cost that cannot be avoided or changed because it arises from a past decision, and is irrelevant to future decisions, is called a(n) :

• A) Uncontrollable cost.
• B) Incremental cost.
• C) Opportunity cost.
• D) Out-of-pocket cost.
• E) Sunk cost.

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Definitions:

Corporate Bylaws

Formal rules governing the management and operations of a corporation, established by the board of directors.

Intrinsic Value

The inherent worth of a company, stock, or other financial asset, determined through fundamental analysis without reference to its market value.

Going Public

The act of selling stock to the public at large by a closely held corporation or its principal shareholders.

Primary Market

The financial market where new securities are issued and sold for the first time to investors, facilitating funds raising for corporations and governments.