Cost which has occurred already and not affected by decisions is classified as______________?
Correct answer: A. Sunk cost
- A. Sunk cost
- B. Occurred cost
- C. Weighted cost
- D. Mean cost
Explanation
A sunk cost has already been incurred and cannot be changed by a current decision, so it should be excluded from relevant decision analysis. “Occurred cost” is not the standard technical classification.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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