Joseph Company Is Considering Replacing an Existing Piece of Machinery

question 56

Multiple Choice

Joseph Company is considering replacing an existing piece of machinery with newer technology.In deciding whether to replace the existing machinery,management should consider which costs as relevant?

• A)Future costs which will be classified as fixed rather than variable.
• B)Future costs which will be different under the two alternatives.
• C)Sunk costs associated with the old machine.
• D)Historical costs associated with the old machine.

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Definitions:

Cognitive Dissonance

The psychological discomfort experienced when holding two or more conflicting cognitions (thoughts, beliefs, or attitudes).

Exercise Behavior

The patterns and habits of physical activity performed by an individual to maintain or improve health.

External Incentive

A motivator or reward from the outside environment that encourages specific behaviors or actions.

Reducing Dissonance

Involves minimizing or eliminating cognitive dissonance, which is the discomfort experienced when holding two or more conflicting cognitions (thoughts, beliefs, or attitudes).