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...
Suppose C is a class that implements the interfaces I and J. Which of the following assignments require a cast? C c = . . .; I i = . . .; J j = . . .; a. c = i; b. j = c; c. i = j;
What is the difference between bivariate regression and multiple regression?
Redfern Corporation, a calendar year taxpayer, has been an S corporation for several years. Rod and Kurt each own 50% of Redferns stock. On July 1 of the current year (assume a non-leap year),...
Term Debt The Company has outstanding Notes, which are senior unsecured obligations with interest payable in arrears. The following table provides a summary of the Company's term debt as of September...
In 2015, Addison Group (a provider of professional staffing services) and Kelton (a global insights firm) surveyed the work preferences and attitudes of 1,006 working adults spread over three...
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...
Show that if , F are both separable over F, then , , and /, if 0, are all separable over F.
Prepare the general journal at the end of the accounting year to transfer sales of $25 000 to the trading account. Show the sales balance of $25 000 in a simple T account format. Post the journal and...
From the account balances of W Wauk (shown in figure 9.62), write next to each account name the account/statement and group abbreviations. Then, using this information, you are required to: prepare...
A petty cash imprest float of $300 is established. Prepare the journal and post to the general ledger accounts in a modified T account format.
Prepare the general journal to transfer the net profit of $7000 to the capital account.
At 30 June 2022, the balance in the rates account was $2500 and there was a prepayment of $500. You are required to prepare the journals on 30 June 2022 for the end-of-period adjustment, the closing...
Army-Navy Surplus Ltd. began March 2017 with 70 tents that cost $20 each. During the month, Army-Navy Surplus made the following purchases at cost: Army-Navy Surplus sold 320 tents (150 tents on...
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...
July August September October November December Total Average 350 450 460 390 390 360 4,960 413 3,020 3,500 4,020 3,290 3,170 3,070 $ 43,571 $ 3,631 PR 6-38 (Algo) Part 4 Compute the variable cost...
Discuss the main distinguishing features of majority, concurring, and dissenting opinions
On September 3, 2023, Wilkins purchased 1244 stock in Brass Corporation for $6,000. On December 31, 2023, the stock was worth $8,500. On August 15, 2024, Wilkins was notified that a. 2023-$0;...

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