How to treat and define sunk costs, opportunity costs, and
cannibalized sales. Also, which of these...
How to treat and define sunk costs, opportunity costs, and
cannibalized sales. Also, which of these items should be considered
(or ignored) when estimating cash flows in a capital budgeting
decision?
Why is it that sunk costs are never relevant to a decision
whereas opportunity costs are always relevant?
Why do you think Goldratt’s Theory of Constraints received so
much press by the business community?
WEEK 5: RELEVANT COSTS
What is an example of an opportunity cost? How about a sunk
cost? Are either of these relevant? Avoidable? Examples from work
would be great!
Regarding sunk costs, which of the following is not true?
a.
Sunk costs, although likely to be important in guiding the
decisions of firms, are unlikely to be influential on market
structure.
b.
Sunk costs are not relevant to the firm’s decisions after it
has entered the market.
c.
Sunk costs are an important factor in determining entry into a
market because these costs may be quite high.
d.
Sunk costs are an important factor in determining entry into a...