Which of the Following Statements Is CORRECT

question 20

Multiple Choice

Which of the following statements is CORRECT?

• A) Sunk costs must be considered if the IRR method is used but not if the firm relies on the NPV method.
• B) A good example of a sunk cost is a situation where a bank opens a new office, and that new office leads to a decline in deposits of the bank's other offices.
• C) A good example of a sunk cost is money that a banking corporation spent last year to investigate the site for a new office, then expensed that cost for tax purposes, and now is deciding whether to go forward with the project.
• D) If sunk costs are considered and reflected in a project's cash flows, then the project's calculated NPV will be higher than it otherwise would be.
• E) An example of a sunk cost is the cost associated with restoring the site of a strip mine once the ore has been depleted.

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Definitions:

Cycle View

An approach in supply chain management focusing on the processes and activities involved in satisfying customer demand through repetitive patterns.

Supply Chain Processes

The operational activities and procedures involved in the flow of goods and services from suppliers to customers in a supply chain.

Customer Orders

Requests made by customers for the purchase of goods or services, which typically specify the quantity and terms of sale.

CRM Systems

Customer Relationship Management Systems, technology platforms that help businesses manage and analyze customer interactions and data.