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Business, 14.10.2020 01:01 josediaz1124

Which of the following statements is NOT CORRECT? a. Sunk costs are the costs associated with "the road not taken". They represent the alternative cost of an asset if that asset were not already owned by the firm; therefore, these costs should be included in the capital budgeting analysis. b. Opportunity costs and sunk costs are tricky when analyzing capital budgeting projects. In summary, for a correct capital budgeting analysis, opportunity costs must be included in the analysis while sunk costs should be ignored—the money is gone whether the project is undertaken or not. c. Sunk costs are cash outlays a company has made in the past, and they can't be recovered whether the new project goes forward or not. Thus, you don't include these costs in the project's capital budgeting analysis. d. An opportunity cost represents the best return a company could get on an asset it already owns. It is the cost of losing out on something if you greenlight the project, so you want to include this cost in the capital budgeting analysis. e. While an opportunity cost is not an actual cash outlay, this cost must be added to the project's costs when you calculate its net present value.

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Which of the following statements is NOT CORRECT? a. Sunk costs are the costs associated with "the r...
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