Shen has plans to go to an opera and already has a $100 nonrefundable, nonexchangeable, and nontransferable ticket. Now Valerie, whom Shen has wanted to date for a long time, asks him to a party. Shen would prefer to go to the party with Valerie and forgo the opera, but he doesn't want to waste the $100 he spent on the opera ticket. From the perspective of an economist, if Van decides to go to the party with Amy, what has he just done?1. Incorrectly allowed a sunk cost to influence his decision

2. Made a choice that was not optimal

3 Correctly ignored a sunk cost

Answers

Answer 1
Answer:

Answer:

3. Correctly ignored a sunk cost

Explanation:

Sunk costs refer to those costs which have been incurred in the past, which are non recoverable and which have no current or future benefits.

Sunk costs are considered as irrelevant for decision making process as they do not relate to current period and have no future implications. For example, research and development expenditure incurred in the past represents a sunk cost.

In the given case, the ticket for opera was already purchased for $100 which can now neither be recovered nor transferred. Thus this cost is irrelevant for decision making as expenditure has already been made. When Shen decided to go for a party instead of the concert, Shen has correctly ignored a sunk cost.


Related Questions

ak Creek Furniture Factory (OCFF), a custom furniture manufacturer, uses job order costing to track the cost of each customer order. On March 1, OCFF had two jobs in process with the following costs: Work in Process Balance on 3/1 Job 33 $ 7,500 Job 34 6,000 $ 13,500 Source documents revealed the following during March: Materials Requisitions Forms Labor Time Tickets Status of Job at Month-End Job 33 $ 3,500 $ 6,500 Completed and sold Job 34 6,000 7,800 Completed, but not sold Job 35 4,200 3,250 In process Indirect 1,300 2,140 $ 15,000 $ 19,690 The company applies overhead to products at a rate of 150 percent of direct labor cost. Required: 1. Compute the cost of Jobs 33, 34, and 35 at the end of the month. 2. Calculate the balance in the Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold accounts at month-end.
You are a U.S. investor who purchased British securities for 2,340 pounds one year ago when the British pound cost $1.52. No dividends were paid on the British securities in the past year. Your total return based on U.S. dollars was __________ if the value of the securities is now 2,440 pounds and the pound is worth $1.61.
What type of maintenance is repair and return to the user, which includes maintenance actions performed by operators and is often performed on or near the unserviceable piece of equipment or weapon system utilizing line replaceable units (FRUs) or modules and competent replacement or repair?
Faux Trees Company produces artificial Christmas trees. A local shopping mall recently made a special order offer; the shopping mall would like to purchase 230 extra-large white trees. Faux Trees Company is currently producing and selling 20,000 trees; the company has the excess capacity to handle this special order. The shopping mall has offered to pay $160 for each tree. An accountant at Faux Trees Company provides an estimate of the unit product cost as follows This special order would require an investment of $5000 for the molds required for the extra-large trees. These molds would have no other purpose and would have no salvage value. The special order trees would also have an additional variable cost of $6.03 per unit associated with having a white tree. This special order would not have any effect on the company's other sales. If the special order is accepted, the company's operating income would increase (decrease) by
Capital accumulation is the​ _____, including​ _____ capital. (A) development of new​ goods; financial (B) increase in​ firms' profits; financial (C) growth of real​ GDP; physical (D) growth of capital​ resources; human

Which financial statement matches asset increases from operating a business with asset decreases from operating the business?Statement of changes in equity.Balance sheet.Statement of cash flows.Income statement.

Answers

Answer:

Income statement

Explanation:

Statement of change in equity: It records beginning balance of equity, ending balance of equity, net income or loss, dividend paid if any.

Balance sheet: It records the assets and the liabilities side of the balance sheet which equals to

Total assets = Total liabilities + Stockholder equity

Statement of cash flows: It records three types of activities:

1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.

2. Investing activities: It records those activities which include purchase and sale of the fixed assets

3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.  

Income statement: It records all income and expenses of a particular period.

In the given question, the increase in assets records under the revenue part whereas if the asset decreases, it records under expenses part of the income statement.  

Kevin invests $800 in an account that earns 5% simple interest. Jeremy invests $600 in an account earning 6%interest compounded annually. Who will have earned more interest after 3 years? How much more?
A. Kevin will have earned $5.39 more than Jeremy after 3 years.
B. Jeremy will have earned $5.39 more than Kevin after 3 years.
C. Kevin will have earned $18.10 more than Jeremy after 3 years.
D. Jeremy will have earned $18.10 more than Kevin after 3 years.

Answers

Answer:

A

Explanation:

When a bill is paid in QuickBooks using the Pay Bills window, QuickBooks: Multiple Choice Increases the Accounts Payable account and increases the Checking account Increases an Expense account and increases the Accounts Payable account Decreases an Expense account and decreases the Checking account Decreases the Accounts Payable account and decreases the Checking account

Answers

Answer:

Decreases the Accounts Payable account and decreases the Checking account

Explanation:

In the case when the bill is paid in quick books by using the window of pay bills so the liabilities would be reduced also the liquid asset would be decreased

Since the liabilities is reduced i.e. account payable so automatically the checking account would also be reduced

hence, the last option is correct

The same is to be considered

Answer:

You would decrease the accounts payable (paying the bill relieves part of the balance in this account) and decreases the cash account (when you pay the bill, you use or reduce the cash)

Explanation:

see my answer for explanation

A loan of 1000 is taken out at an annual effective interest rate of 5%. The loan will be repaid using the Sinking Fund Method. That is, level annual interest payments are made at the end of each year for 10 years, and the principal amount for the loan is repaid at the end of 10 years by making equal size payments into the fund at the end of each year for 10 years. If the sinking fund earns an annual effective interest rate of 4%, then find the difference between the interest payment on the loan and the interest earned by the sinking fund in the fifth year. Round your answer to the nearest whole number.

Answers

Answer:

Interest paid each year = 5% of 1000 = $50

$1000 is to be paid at the end of 10 years.So payment each year = pmt(rate,nper,pv,fv) where rate = 0.04,nper=10 and fv =1000.

Payment into the fund =pmt(0.04,10,0,1000) = $83.29 each year

Value of the sinking fund at the end of the 4th year =pv(rate,nper.pmt) =pv(0.04,4,83.29) = 302.34

Interest earned by sinking fund in year 5 = 0.04*302.34 = 12.09

Interest on loan in 5th year = $50

So difference between the interest payment on the loan and the interest earned by the sinking fund in the fifth year. = 50-12.09 = 37.91 = $38 (to nearest whole number)

Doing business in the financial markets most fundamentally presupposes that _______ will be respected.

Answers

Answer:

Ideas

Explanation:

While doing the business in the financial market the fundamental thing that prior supposed is that of ideas which could be respected

With the ideas of an individual, the individual could accomplish their targets and if there is no ideas than it is impossible to accomplish their goals and objectives

Therefore the ideas would be the answer

In general, what are the benefits of the Internet to (i) the business person, (ii) an organization, (iii) a nation and (iv) a global society

Answers

Answer:

Explanation:

The Internet is essential for a successful business. The Internet helps businesses to achieve their goals and succeed in this competitive market. Marketing is important for business, and in this case the internet is the first and most important marketing tool for business owners. The Internet gives entrepreneurs great advantages in building a business infrastructure based on customer data and information. In this modern era, successful work without the Internet is impossible. The Internet has changed the ways in which education, communication and data are imported and exported. Internet technology provides excellent data management resources to offer customers unique and creative solutions.

The benefits of turning the organization world to the Internet are immense. The Internet provides great opportunities for organizational suppliers and cost reduction at all stages of the manufacturing process. Supply costs can be reduced through increased markets and increased competition through online supply systems. Another option is to transfer sales and data to cheaper channels. The Internet can significantly accelerate the market by reducing the time needed to transfer, purchase and process daily business contacts such as purchase orders, invoices and shipping. notifications. The Internet has greatly expanded the area of ​​information management: documents and technical documentation can be changed in real time, legally recognized signatures can be used, browsers can be accessed from suppliers and customers' data systems, and processes can be completed faster.

The Internet is a very effective tool for the nation. It has the potential to increase productivity through various but mutually reinforcing ways, including:

- Significantly reduce the cost of many operations required for the production and distribution of goods and services;

- Increase managerial efficiency, especially for companies to manage supply chains more efficiently and to communicate more easily within the company and with customers and partners;

- Increasing competition, price transparency and expanding markets for buyers and sellers;

Increasing marketing and pricing efficiency;

- Increase consumer choice, comfort and satisfaction in a variety of ways.

Many people like to think that mankind is at the beginning of a new era of enlightened communication. The visions are packed with how we can live, work, work and change our interactions with digital technology. It is believed that the Information Age will bring about fundamental change and development and that all countries around the world are building the necessary infrastructure, the "data highways" to respond to the challenges of twenty information societies. It is assumed that the digital revolution promises a lot of progress for developing countries and is allowed to leapfrog the more developed countries by leaps and bounds. The idea of ​​joining the global information society is strongly defended not only by business interests, but also worldwide. Increasingly, the measures are aimed at bringing new information technologies to less developed regions of the world, political agendas at the international, regional and national levels and less international development efforts. to improve people's lives. However, it is important to think about what these needs are if they are properly implemented. Disadvantaged people face major health problems, lack of education, and difficulties in ending.