When a firm ignores the opportunity cost of capital when making investment or shutdown decisions, this is

Question:

When a firm ignores the opportunity cost of capital when making investment or shutdown decisions, this is a case of

a. Fixed-cost fallacy.

b. Sunk-cost fallacy.

c. Hidden-cost fallacy.

d. None of the above.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Managerial Economics

ISBN: 9781337106665

5th Edition

Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward

See More Books

Question Posted: Jul 08, 2020 02:36 AM

See More Questions

Sunk costs should not be considered when making decisions. 1. Define sunk cost. 2. Explain why economists advise individuals to ignore sunk costs.
If the opportunity cost of capital is 11%, which of these projects is worth pursuing? Year Project A Project B -$200 100 100 100 0 $200 80 80 80 80 4
If the opportunity cost of capital is 11 %, what is the profitability index for each project? Is the project with the highest profitability index also the one with the highest NPV? Which criterion...
John works in a factory as a Quality Expert and is responsible for doing quality product testing before the finished products are sent to the customers. John takes a sample of 10 from a batch of 1000...
The rate law for addition of Br2 to an alkene is first order in Br2 and first order in the alkene. Does this fact prove that the mechanism of addition of Br2 to an alkene proceeds in the same manner...
Describe the balanced scorecard as a comprehensive performance measurement system. (p. 364) LO.1
Low-carb versus low-fat. Researchers conducted an experiment to compare the effects of a carbohydrate-restricted diet (low-carb diet) and a calorie- and fat-restricted diet (low-fat diet) on weight...
Parandah Electronics Ltd., located in England, assembles a standard electrical component from parts it purchases from various suppliers. The production process consists of several steps, starting...
Calculate the 2 0 2 3 depreciation for the assets listed above.
Although DonorsChoose.org is a nonprofit organization, a charitable organization by most any standard, it operates as though it is a business, albeit a highly effective and efficient one. Much like...
The U.S. government bought 112,000 acres of land in southeastern Colorado in 1968 for $17,500,000. The cost of using this land today exclusively for the reintroduction of the black-tailed prairie dog...
Describe an extent decision made by your company. Compute the MC and marginal benefit of the decision. Was the right decision reached? If not, what would you do differently? Compute the profit...
A telephone companys goal is to have no more than five monthly line failures on any 100 miles of line. The company currently experiences an average of two monthly line failures per 50 miles of line....
(AVR) PR=IAVR=1R = (power dissipated by a resistor) (28.12) R
As a manager and an entrepreneur, you will face a new challenge - business venture structured on the theory of the firm. You are opening a restaurant in your selected town in the State of NY (please...
Install on ubuntu , please provide a screenshot for each step 1)How to install base64 on ubuntu 2)What kind of analysis is performed by Cuckoo? How to install Cuckoo on ubuntu?
rt a letter to Rose McBride. Writing Plan - Refusal to a Request Rubric Buffer: Start with a neutral statement on which both reader and writer can agree, such as a compliment, appreciation, a quick...
FACTS: The Budvar Company sells parts to a foreign customer on December 1, Year 1, with payment of 20,000 crowns to be received on March 1, Year 2. Budvar enters into a forward contract (with a...
The 2-kg sphere is projected horizontally with a velocity of 10 m /s against the 10-kg carriage which is backed up by the spring with stiffness of 1600 N/m. The carriage is initially at rest with the...
Is the modified 5-question approach to ethical decision making superior to the modified moral standards or modified Past in approach?
In the answer to Demonstration Problem 42 in the text, we showed a situation in which a gift certificate leads a consumer to purchase a greater quantity of an inferior good than he or she would...
Provide an intuitive explanation for why a buy one, get one free deal is not the same as a half-price sale.
In the below figure, a consumer is initially in equilibrium at point C. The consumer??s income is $300, and the budget line through point C is given by $300 = $50X + $100Y. When the consumer is given...
Ted and his partners have contracted to purchase the franchise nights worth 561 000 to open and operate a specialty pizza restaurant called Popper with a renewable agrement, the partners have agreed...
Your answer is partially correct. Martin Company's chief financial officer feels that it is important to have data for the entire quarter especially since their financial forecasts indicate some...
Kellog Corporation is considering a capital budgeting project that would have a useful life of 4 years and would love testing 5156.000 in equipment that would have zeto salvage value at the end of...

When a firm ignores the opportunity cost of capital when making investment or shutdown decisions, this is

Question:

Step by Step Answer:

C Hiddencost fall...View the full answer

Managerial Economics

Students also viewed these Business questions