Which of the following is not an example of a real option in a capital budgeting decision?
Answer(s): D
Real options include such factors as the ability to abandon the project early. the opportunity for follow-up investments or ability' to create new products, the ability' to base additional cash outflows on a wait-and-learn opportunity', or the option to change capacity' during the project. Risk-adjusted discount rates are not real options but are a form of sensitivity' analysis.
The relevance of a particular cost to a decision is determined by
Relevance is the capacity of information to make a difference in a decision by helping users of that information to predict the outcomes of events or to confirm or correct prior expectations. Thus, relevant costs are those expected future costs that vary with the action taken. All other costs are constant and therefore have no effect on the decision.
Of the following decisions, capital budgeting techniques would least likely be used in evaluating the
Capital budgeting is the process of planning expenditures for investments on which the returns are expected to occur over a period of more than 1 year. Thus, capital budgeting concerns the acquisition or disposal of long-term assets and the financing ramifications of such decisions. The adoption of a new method of allocating non-traceable costs to product lines has no effect on a company's cash flows, does not concern the acquisition of long- term assets, and is not concerned with financing. Hence, capital budgeting is irrelevant to such a decision.
In equipment-replacement decisions1 which one of the following does not affect the decision-making process?
Answer(s): C
All relevant costs should be considered when evaluating an equipment-replacement decision. These include the cost of the new equipment1 the disposal price of the old equipment, and the operating costs of the old equipment versus the operating costs of the new equipment. The original cost or fair market value of the old equipment is a sunk cost and is irrelevant to future decisions.
The term that refers to costs incurred in the past that are not relevant to a future decision is
A sunk cost cannot be avoided because it represents an expenditure that has already been made or an irrevocable decision to incur the cost.
Share your comments for Financial CMA exam with other users:
i am really liking it
thanks good stuff
need dump c_tadm_23
next time i will write a full review
first time using this site
please sent me oracle 1z0-1105-22 pdf
very helpful
good info about oml
very useful to practice
this website is very helpful.
good content
so challenging
17 should be d ,for morequery its scale out
nice question
yes.
good mateial
good practice exam
impressivre qustion
questions seem helpful
question 21 answer is alerts
am preparing for exam
good one thanks
only got thru 5 questions, need more to evaluate
q26 should be b
the aaa triad in information security is authentication, accounting and authorisation so the answer should be d 1, 3 and 5.
need to attend this
these are free brain dumps i understand, how can one get free pdf
provide access
good morning
please upload the ncp-mci 6.5 dumps, really need to practice this one. thanks guys
question 16: https://help.salesforce.com/s/articleview?id=sf.care_console_overview.htm&type=5
yes i m prepared exam
my experience was great with this site as i studied for the ms-900 from here and got 900/1000 on the test. my main focus was on the tutorials which were provided and practice questions. thanks!