A company is evaluating two different pieces of equipment for investment.Fixed overhead costs will be the same under each investment alternative.Fixed overhead costs are a(n)________ cost in the net present value method.

Question

Quizplus · Accepted Answer

Fixed overhead costs are typically considered to be irrelevant costs in the net present value method, as they do not change regardless of which investment alternative is chosen. Therefore, the best choice(s) cannot be determined based on fixed overhead costs alone. Other relevant costs and benefits would need to be considered in the analysis.

A Company Is Evaluating Two Different Pieces of Equipment for Investment.Fixed