When Considering a Project That Will Require Production Using Otherwise

question 87

Multiple Choice

When considering a project that will require production using otherwise idle resources, which of the following are TRUE?

• A)Avoidable fixed costs are irrelevant.
• B)Only the variable costs of the project are relevant.
• C)Only financial factors should be considered.
• D)The project should not be undertaken if total revenue from the project is less than the total costs of production.
• E)In the short run, even if revenue is less than the total costs of production, the project could help the company's overall operating income.

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