Presented Below Are Terms Preceded by Letters a Through F

question 85

Short Answer

Presented below are terms preceded by letters a through f and followed by a list of definitions 1 through 6. Match the letter of the terms with the definitions. Use the space provided preceding each definition.
(a) Sunk cost
(b) Opportunity cost
(c) Out-of-pocket cost
(d) Net present value
(e) Incremental cost
(f) Annuity
________ (1) A cost that requires a future outlay of cash and is relevant for current and future decision making.
________ (2) A series of cash flows of equal dollar amount over equal time periods.
________ (3) An estimate of an asset's value to the company; computed by discounting the future net cash flows from the investment the project's required rate of return and then subtracting the initial amount invested.
________ (4) A cost that cannot be avoided or changed because it arises from past decision; irrelevant to future decisions.
________ (5) An additional cost incurred if a company pursues a certain course of action.
________ (6) The potential benefits lost by taking a specific action when two or more alternative choices are available.

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Definitions:

Red Blood Cells

Cells in the blood that transport oxygen from the lungs to the body tissues and carbon dioxide as a waste product back to the lungs.

Psychological Hardiness

A personality characteristic characterized by resilience and the ability to cope effectively with stress.

Helpless

A state of lacking the means or ability to manage, make decisions, or act effectively.