Which of the following would not be expected to affect the decision of whether to undertake an investment?
A)Income tax rates
B)Estimates of inflation rates
C)Sales reductions in other products caused by this investment
D)Cost of the feasibility study which was conducted for this project

Question

Quizplus · Accepted Answer

The cost of the feasibility study is a sunk cost and should not affect the decision to undertake the investment. A sunk cost is a cost that has already been incurred and cannot be recovered. Income tax rates, estimates of inflation rates, and sales reductions in other products caused by this investment are relevant factors that can affect the decision.

Which of the Following Would Not Be Expected to Affect