Presented below are terms preceded by letters (a)through (f)and followed by a list of definitions 1 through 6.Match the letter of the terms with the definitions.Use the space provided preceding each definition.
(a) Incremental cost
(b) Opportunity cost
(c) Out-of-pocket cost
(d) Relevant cost
(e) Sunk cost
(f) Relevant benefits.
__________ (1) A cost that requires a current outlay of cash.
__________ (2) The incremental revenue generated by selecting a particular course of action over another.
__________ (3) An avoidable cost.
__________ (4) A cost that cannot be avoided or changed in any way because it arises from a past decision; irrelevant to current and future decisions.
__________ (5) An additional cost incurred only if a particular action is taken.
__________ (6) The potential benefits of one alternative that are lost by choosing an alternative course of action.
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