Question: Including irrelevant costs can: 1 . Overestimate Costs: By adding things like fixed or sunk costs, you might make the purchase seem too expensive. 2
Including irrelevant costs can:
Overestimate Costs: By adding things like fixed or sunk costs, you might make the purchase seem too expensive.
Reduce Future Profits: You might pass up good opportunities because your cost estimates are too high.
Lead to Bad Decisions: You could make less efficient choices, increasing future expenses.
Focusing only on relevant costs helps companies make better decisions and improve future profitability.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
