11. Using an example of each, explain sunk costs and opportunity costs. Which of these costs...
11. Using an example of each, explain sunk costs and opportunity costs. Which of these costs should be included in incremental cash flows and which should be excluded?
Homework Answers
Sunk Costs are cost which can never be recovered The cost are
permanent in nature. These cost can never be recovered.
Example : Machinery, Equipment
Opportunity Costs are costs which are fore gone for the next best
investment opportunity .
E.g. Investment in Fixed deposit,etc.
Only Opportunity cost should be added and sunk costs should be
excluded.
Please Discuss in case of Doubt
Best of Luck. God Bless
Please Rate Well
Add Answer to:
11. Using an example of each, explain sunk costs and opportunity
costs. Which of these costs...
Plz have at least 200words for each Explain sunk costs and opportunity costs. Provide a business...
Plz have at least 200words for each Explain sunk costs and opportunity costs. Provide a business example for each of these terms. What are the difficulties in preparing a sales budget? Explain and provide a business example for each accounting term: controllable costs and noncontrollable costs.
Explain the effects of sunk costs and opportunity costs in deciding whether to accept a project....
Explain the effects of sunk costs and opportunity costs in deciding whether to accept a project. Review the financial considerations a company should make before investing in a project.
Describe controllable, differential, relevant, sunk, opportunity, average, incremental, and standard costs. Describe controllable： Differential： Relevant： Sunk：...
Describe controllable, differential, relevant, sunk, opportunity, average, incremental, and standard costs. Describe controllable： Differential： Relevant： Sunk： Opportunity： Average： Incremental： Standard costs： At lease 300 words
Part 1 When calculating incremental cash flows, we should exclude _____. A. sunk costs B. side...
Part 1 When calculating incremental cash flows, we should exclude _____. A. sunk costs B. side effects C. opportunity costs D. taxes
9. What is the intuition behind the IRR rule? Under what conditions will the IRR rule...
9. What is the intuition behind the IRR rule? Under what conditions will the IRR rule and the NPV rule give the same accept/reject decision? 10. Explain what is meant by ‘mutually exclusive projects’ and why it is generally a bad idea to use IRR to choose between mutually exclusive projects? 11. Using an example of each, explain sunk costs and opportunity costs. Which of these costs should be included in incremental cash flows and which should be excluded? 12....
In addition to the above (sunk costs, opportunity costs, incremental costs) many times there are qualitative...
In addition to the above (sunk costs, opportunity costs, incremental costs) many times there are qualitative factors that come into the decision making process. What nonquantitative aspects may also be relevant to the decision?
Sunk costs and opportunity costs Masters Golf Products, Inc., spent 4 years and $1,020,000 to develop...
Sunk costs and opportunity costs Masters Golf Products, Inc., spent 4 years and $1,020,000 to develop its new line of club heads to replace a line that is becoming obsolete. To begin manufacturing them, the company will have to invest $1,770,000 in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $746,000 per year for the next 12 years. The company has determined that the existing line could be sold to a competitor...
Sunk costs and opportunity costs - Masters Golf Products, Inc. spent 4 years and $1,160,000 to...
Sunk costs and opportunity costs - Masters Golf Products, Inc. spent 4 years and $1,160,000 to develop its new line of club heads to replace a line that is becoming obsolete. To begin manufacturing them, the company will have to invest $1,850,000 in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $746,000 per year for the next 14 years. The company has determined that the exiting line could be sold to a...
Sunk costs and opportunity costs Masters Golf Products, Inc., spent 2 years and $1,160,000 to develop...
Sunk costs and opportunity costs Masters Golf Products, Inc., spent 2 years and $1,160,000 to develop its new line of club heads to replace a line that is becoming obsolete. To begin manufacturing them, the company will have to invest $1,850,000 in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $752,000 per year for the next 14 years. The company has determined that the existing line could be sold to a competitor...
Which of the following is a basic principle when estimating a project's cash flows? Cash flows...
Which of the following is a basic principle when estimating a project's cash flows? Cash flows should be measured on a pretax basis accounting for the risk of individual projects Cash flows should ignore depreciation because it is a noncash charge Only direct effects of a project should be included in cash flow calculations Cash flows should be measured on an incremental basis D 4. In estimating the net investment, an outlay that has already been made is known as...
Plz have at least 200words for each Explain sunk costs and opportunity costs. Provide a business example for each of these terms. What are the difficulties in preparing a sales budget? Explain and provide a business example for each accounting term: controllable costs and noncontrollable costs.
Sunk costs and opportunity costs Masters Golf Products, Inc., spent 4 years and $1,020,000 to develop its new line of club heads to replace a line that is becoming obsolete. To begin manufacturing them, the company will have to invest $1,770,000 in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $746,000 per year for the next 12 years. The company has determined that the existing line could be sold to a competitor...
Sunk costs and opportunity costs Masters Golf Products, Inc., spent 2 years and $1,160,000 to develop its new line of club heads to replace a line that is becoming obsolete. To begin manufacturing them, the company will have to invest $1,850,000 in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $752,000 per year for the next 14 years. The company has determined that the existing line could be sold to a competitor...
Which of the following is a basic principle when estimating a project's cash flows? Cash flows should be measured on a pretax basis accounting for the risk of individual projects Cash flows should ignore depreciation because it is a noncash charge Only direct effects of a project should be included in cash flow calculations Cash flows should be measured on an incremental basis D 4. In estimating the net investment, an outlay that has already been made is known as...
Most questions answered within 3 hours.
-
A car moving at 87 km/h has tires of 76 cm diameter. If the
vehicle comes...
asked 8 minutes ago -
Most of the galaxies in the universe are observed to be moving
away from Earth. Suppose...
asked 11 minutes ago -
Paired research designs, also sometimes referred to as repeated
measures designs, are associated with some common...
asked 10 minutes ago -
You working as a clinical engineer dealing with
autoclaves, xrays and life care machines, in what...
asked 13 minutes ago -
Explain in detail (not just enumerate) each of Koch’s
postulates to determine the etiology of a...
asked 25 minutes ago -
Assume ABC Company has asked you to not only prepare their 2017
year-end Balance Sheet but...
asked 23 minutes ago -
You have just had a new set of tires put on your car, and now
the...
asked 28 minutes ago -
Please answer ASAP 2) Choose a point at random from the unit
square [0, 1] ×...
asked 42 minutes ago -
Draw the Lewis structures and determine which of these
molecules has a central atom that unavoidably...
asked 43 minutes ago -
Do we typically carry antibodies against the RH antigen in our
blood plasma?
asked 45 minutes ago -
What are the differences between an antibiotic, a semisynthetic,
and a synthetic as types of antimicrobials?
asked 41 minutes ago -
One mole of oxygen gas is at a pressure of 5.90 atm and a
temperature of...
asked 49 minutes ago