Which of the Following Is an Appropriate Step When Identifying

question 58

Multiple Choice

Which of the following is an appropriate step when identifying relevant costs to make a business decision?

• A) assuming all variable costs are relevant
• B) assuming all fixed costs are irrelevant
• C) separating total costs into business function costs and full costs
• D) separating total costs into variable and fixed components

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Definitions:

Invested at

Typically implies allocating resources, such as time or money, into a venture, asset, or project with the expectation of receiving future returns.

Internal Rate of Return

A financial metric used to evaluate the profitability of potential investments, calculated as the interest rate that makes the net present value of all cash flows equal to zero.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used to assess the profitability of an investment or project.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.