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
Question 2
Wall Street Week is a weekly publication of the editors of The Wall Street Journal.
Indicate whether the statement is true or false
Charles Darwin may be dead and gone but a recent write-in campaign has pitted him against Republican
Space-Beach Wallpaper
The Hubble Space Telescope
Increasing Costs of Natural Disasters
A space-filling model of DNA.
An educational institution has total direct labor and material costs of $1964 per student. Its ...