A Company Is Considering a New Project That Will Cost

question 7

Multiple Choice

A company is considering a new project that will cost $19,000. This project would result in additional annual revenues of $6,000 for the next 5 years. The $19,000 cost is an example of a(n) :

• A) Sunk cost.
• B) Fixed cost.
• C) Incremental cost.
• D) Uncontrollable cost.
• E) Opportunity cost.

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Definitions:

Germany

A country in Central Europe known for its rich history, cultural heritage, and economic prowess.

Production

The process of creating goods or services using inputs such as labor, raw materials, and machinery.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to utilize resources in a particular way.

Germany

A country in Central Europe known for its rich history, technological innovations, and economic power.