Which of the following should be included in the analysis of a proposed investment? I. erosion effects
II) opportunity costs
III) sunk costs
IV) side effects

Question

Quizplus · Accepted Answer

All four factors should be considered when analyzing a proposed investment. Erosion effects refer to the potential negative impact on existing revenue streams or profits. Opportunity costs are the foregone alternative benefits of choosing one investment option over another. Sunk costs are costs that have already been incurred and cannot be recovered. Side effects are the unintended consequences of the investment. Considering all of these factors will lead to a more comprehensive analysis of the proposed investment.

Which of the Following Should Be Included in the Analysis