Which of the Following Statements Is True

question 39

Multiple Choice

Which of the following statements is true?

• A) Neither sunk costs nor the sinking of a cost will affect a decision maker's best choice
• B) Both sunk costs and the sinking of a cost will affect a decision maker's best choice
• C) Sunk costs will affect a decision maker's best choice, but the sinking of a cost will not
• D) Sunk costs will not affect a decision maker's best choice, but the sinking of a cost will affect their choice

---

Definitions:

Cash Collections

The process of gathering all cash receipts and payments, including from sales, financing, or investment activities.

Credit Customers

Customers who purchase goods or services on credit, with an agreement to pay at a later date.

Cash Disbursements

The outflow of cash for the purpose of payment, often documented for accounting purposes.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced to the product.