XYZ, Inc Is Considering Adding a Product Line That Would Utilize

question 18

Multiple Choice

XYZ, Inc. is considering adding a product line that would utilize floor space in their manufacturing plant which is currently used for storage. XYZ will need to rent new storage space elsewhere. The floor space would be considered a(n)

• A) variable cost.
• B) opportunity cost.
• C) sunk cost.
• D) irrelevant cash flow.

---

Definitions:

Stop Payment Order

A request made to a bank by an account holder not to pay a check or payment that has been issued but not yet cashed.

Banker's Acceptance

A short-term financial instrument issued by a company but guaranteed by a bank as accepted for payment at a future date, often used in international trade.

Electronic Funds Transfers

The electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems.

POS

Point Of Sale; a system used at retail locations to manage sales, inventory, and customer transactions.