Fixed Costs That Do Not Differ Between Two Alternatives Are

question 28

Multiple Choice

Fixed costs that do not differ between two alternatives are:

• A)relevant to the decision.
• B)considered opportunity costs.
• C)considered irrelevant to the decision.
• D)important only if they represent a material dollar amount.

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Definitions:

Cost of Capital

The yield a corporation needs to generate from its investment ventures to sustain its market price and appeal to investors.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage.

Short-term Borrowings

Loans or financial obligations that are due for repayment within a short period, typically less than a year.

Fiscal Year

A one-year period used for financial reporting and budgeting by companies and governments, which may not align with the calendar year.