Label each of the following statements as either true (“T”) or false (“E”).

1. Relevant costs are also known as unavoidable costs.

2. Incremental costs are also known as differential costs.

3. An out-of-pocket cost requires a eurrent and/or future outlay of cash.

4. An opportunity cost is the potential benefit that is lost by taking a specific action when two or more alternative choices are available.

5. A sunk cost will change with a future course of action.