0
Why is it important to look at the hidden costs when making a decision?
Wiki User
∙ 8y agoWant this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
When a decision is made what two things is a decision maker considering?
Two things a decision maker considers when making a decision are future costs and benefits of the decision. Other things are sometimes considered when making decisions including future consequences of the decision.
Are sunk costs easy to spot and are they simply the fixed costs associated with a decision?
Sunk costs are costs that have been incurred that cannot be reversed. For example, if you owned a car and payed for repairs that were not refundable and were deciding whether or not to purchase a new car, you would not consider the repair costs in your decision because those costs have already been made and you cannot receive the money back. You would only consider the costs that you may incur in the future when making your decision whether or not to purchase another car. Sunk costs are not considered in your decision.
What is marginal analysis?
A type of cost-benefit decision making that compares the extra benefits to the extra costs of an action
A decision-making tool that weighs additional costs and benefits of going for one more unit of something?
Marginal analysis...
What does thinking at the margin mean?
Thinking about the costs and benefits of making changes in behavior. when you make a decision, most people think on the margin, meaning they think about the positive and negative benefits of making one decision rather than another.
Which costs is often important in decision making but is omitted from conventional accounting records?
opportunity cost
What are the differences between relevant cost and irrelevant cost?
In decision making process those cost which are effected from the decision under consideration those costs are called relevent costs and those costs which have no impact on decision making of specific project are called irrelevent costs.
Are sunk costs ever relevant for decision-making purposes?
NO, its cost which was wasted in past we can not recover it so it is not relevant for decision making.
What can a decision- making grid do?
help you determine the oppotunit cost of your decision.
All future costs are relevant in decision making?
Future costs are relevant in decision making if the decision will affect their amounts. For example, suppose you're trying to decide whether to drive to work or take the bus. Relevant future costs information includes (1) the cost of gasoline and tolls needed to drive to and from work and (2) the cost of bus fare because both of these costs depend on your decision. However, future costs that won't change - such next month's rent on your apartment - are not relevant because, regardless of your decision, they will not change. Note that past costs are never relevant in decision making.
The most relevant costs that should be used in decision making are?
dadada
A decision-making method that compares costs and benefits?
rational choice
Is variable cost a relevant cost?
No. If a variable cost does not differ between alternatives than it is irrelevant.
Are all future cost are relevant in decision making?
Future costs are relevant in decision making if the decision will affect their amounts. For example, suppose you're trying to decide whether to drive to work or take the bus. Relevant future costs information includes (1) the cost of gasoline and tolls needed to drive to and from work and (2) the cost of bus fare because both of these costs depend on your decision. However, future costs that won't change - such next month's rent on your apartment - are not relevant because, regardless of your decision, they will not change. Note that past costs are never relevant in decision making.
Finance as a means of maximizing lifetime satisfaction?
making a decision with the most costs
Are marginal costs relevant costs?
If marginal costs are relevant for specific situation or specific decision making scenario then marginal costs are relevant costs otherwise marginal costs can be irrelevant.
When a decision is made what two things is a decision maker considering?
Two things a decision maker considers when making a decision are future costs and benefits of the decision. Other things are sometimes considered when making decisions including future consequences of the decision.
