A company is expanding and has already signed a lease on new office space that costs $10,000 per
month. The company also needs a new information system and hired a consultant to recommend
new software.
The consultant was paid $5,000 for her recommendation. Now the company is trying
to make a choice between three competing software products. In the capital budgeting decision to
purchase new software, the monthly rent for the office space is ________ and the consultant's fee is
________.
A) a sunk cost; a sunk cost
B) a sunk cost; a part of the initial outlay
C) an opportunity cost; a sunk cost
D) incremental cash outflow; an opportunity cost
A
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The revenue recognition principle is the basis for making adjusting entries that pertain to unearned and accrued revenues.
Answer the following statement true (T) or false (F)
Which of the following is an example of an offer to make a unilateral contract?
A) Jose offers to sell Melinda his car for $20,000. B) Martin offers to fund the renovation of Billy's farm to help ease his debt problems. C) Robert offers to take Jasmine to the park on Thursday if it does not rain. D) Helena offers to pay $300 to anyone who finds her lost puppy and returns it to her.
The general rule for a new startup is to
a. avoid seeking investment for as long as possible b. try to get as much funding as possible as soon as possible c. to immediately line up one committed investor with deep pockets d. seek many small investments from a wide range of people right away
King Company experienced an accounting event that affected its financial statements as indicated below:Assets=Liab.+Stk.EquityRev.?Exp.=Net Inc.Stmt. ofCash Flows? ? ?NA + ??FA/?OAWhich of the following accounting events could have caused these effects on King's statements?
A. Issued a bond at a discount. B. Repaid a bond issued at a discount. C. Made a payment on an installment loan. D. Borrowed funds through a line-of-credit.