Activity-Based Management Attempts to

question 73

Multiple Choice

Activity-based management attempts to

• A) identify and eliminate all unnecessary activities.
• B) increase the efficiency of necessary activities.
• C) add new activities that increase value.
• D) do all of these.

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Definitions:

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives, typically aimed at achieving a specific goal.

Equivalent Annual Cost

A financial analysis tool used to compare the cost effectiveness of two or more projects with differing lifespans, by calculating the annual cost of each.

Sunk Cost

A cost that has already been incurred and cannot be recovered.

Stand-Alone Principle

A method of evaluating investment projects as if they were the only project the company is undertaking, assessing their viability on their individual merits.