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 that was conducted for this project

Question

Quizplus · Accepted Answer

The cost of the feasibility study is already a sunk cost and has already been incurred. Thus, it should not affect the decision of whether to undertake the investment. Income tax rates, estimates of inflation rates, and sales reductions in other products caused by this investment are all relevant factors that could have an impact on the decision to invest.

Which of the Following Would Not Be Expected to Affect