Estimated Future Costs That Differ Between Alternative Courses of Action

question 5

Multiple Choice

Estimated future costs that differ between alternative courses of action are termed __________ costs in management decision analysis.

• A) variable overhead
• B) relevant
• C) absorption
• D) replacement

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Financial Viability

The ability of an entity or project to manage its expenses and generate sufficient revenue to continue operating effectively.

Residential Neighborhoods

Areas primarily containing housing where people live, often differentiated by types of housing, socioeconomic status, and urban planning.

Externalities

Negative or positive impacts on third parties stemming from business operations, which are not accounted for in the pricing of products or services.