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:
Answer rating: 64% (17 reviews)
C Hiddencost fall...View the full answer
Answered By
Sandhya Sharma
I hold M.Sc and M.Phil degrees in mathematics from CCS University, India and also have a MS degree in information management from Asian institute of technology, Bangkok, Thailand. I have worked at a international school in Bangkok as a IT teacher. Presently, I am working from home as a online Math/Statistics tutor. I have more than 10 years of online tutoring experience. My students have always excelled in their studies.
4.90+
119+ Reviews
214+ Question Solved
Related Book For
Managerial Economics
ISBN: 9781337106665
5th Edition
Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward
Question Posted:
Students also viewed these Business 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...
-
Marquita Filters pro duces an air filter for use in jet aircraft. Parts are added at several points in their pro duction process. In August, production began with 600 filters in Work in Process, 80...
-
On January 1, 2008, Pitt Company purchased an 80% investment in Saxe Company. The acquisition cost was equal to Pitts equity in Saxes net assets at that date. On January 1, 2008, Pitt and Saxe had...
-
Flexible budget Brabham enterprises manufactures tires for the Formula l motor racing circuit. For August 2009, it budgeted to manufacture and sell 3000 tires at a variable cost of $ 74 per tire and...
-
Question 13 Firefox File Edit View History Bookmarks T s Tools Window Help Micomes Section Quiz #2 @ A https-/ nect.mheducation.com/flow/connect.html Section Quiz #2 0 Saved Help Save & Exit Submi...
-
SkiCo, Inc., manufactures ski boots. The companys projected income for the coming year, based on sales of 160,000 units, is as follows: Required: In completing the following requirements, ignore...
-
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...
-
What considerations enter into the financing decisions of ventures that are facing financial distress?
-
Why must modern marketers collaborate and learn from their consumers? What has increased the opportunities for marketers to collaborate with them?
-
Explain why L-systems are of interest to Artificial Life researchers.
-
Explain how genetic programming could be used to solve problems.
-
Explain how a system might be built that could reproduce itself. Would such a system be alive?
-
Explain how Conways Life is modeled on life. What interesting properties does it exhibit? Why do you think it has fascinated people for so long?
-
Is the use of time study formulas restricted to machine shop operations where feeds and speeds influence standard times? Explain.
-
What are the principal differences among asset liquidity management, liability management, and balanced liquidity management?
-
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...
-
A proof of cash Blank______. Multiple select question. reconciles the bank balance, bank reports of cash deposited and paid general ledger entries is used to discover unrecorded cash transactions is...
-
Per FAR 42.701, provisional rate or billing rate is an established temporary indirect rate applicable to a specified period (fiscal year) for the purpose of allowing interim reimbursement of incurred...
-
The details of transactions between the company and its owners' family members do not need to be disclosed separately in the notes to the financial statements. Group startsTrue or False
Study smarter with the SolutionInn App