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<p><span>a- Sunk Cost</span></p> <p><span>b- Opportunity Cost</span></p> <p><span>c- Allocated Overheads</span></p> <p><span>d- Both (a) and (c) above</span></p> <p> </p>
OPTION D: Both A and C
Capital Budgeting is a process of making a decision about the financial desirability of a project.
Here,Sunk cost(A) and Allocated overheads(C) is not relevant in capital budgeting.
Number a
Sunk cost
d- Both (a) and (c) above
D. i.e. (a) & (c), are irrelevant, since sunk cost is not budgeted while overheads are semi variable based on level of activity, and both are not part of operating expenses or initial working capital.
On the other hand opportunity cost is quite relevant and a deciding factor, for choosing best least cost alternative.
Many Thanks.
Answer option (d) >>>>>>>>>>>>>> Both (a) and (c) above
D is the correct answer
All above are irrelevant for capital budgeting.
Option D
