The managers of Coyle Ltd are currently assessing a potential new product which will require a significant capital investment. In the process they have employed consultants to assess the market for the product. Which of the following statements are correct? For investment appraisal decisions the expenditure on market research is categorized as:

Question

Quizplus · Accepted Answer

The expenditure on market research is considered an avoidable cost because it is a discretionary expense that can be avoided if the investment is not made. Opportunity cost refers to the benefits foregone by choosing one investment over another, sunk costs are costs that have already been incurred and cannot be recovered, and unavoidable costs are costs that cannot be avoided regardless of the investment decision.

The Managers of Coyle Ltd Are Currently Assessing a Potential