Triumph Incorporated is studying whether to expand operations by adding a new product line. Which of the following costs should be considered in this decision? $\begin{array}{|l|l|c|}
\hline &\text { Opportunity Cost } & \text { Sunk Cost } \
\hline 1& \text { Yes } & \text { Yes } \
\hline 2& \text { Yes } & \text { Sometimes } \
\hline3 & \text { Yes } & \text { No } \
\hline4 & \text { No } & \text { Yes } \
\hline 5& \text { No } & \text { No }
\end{array}$
A)1
B)2
C)3
D)4
E)5

Question

Quizplus · Accepted Answer

Opportunity costs should always be considered in decision-making as they represent the benefits missed by selecting one option over another. Sunk costs, on the other hand, are irrelevant to decisions because they represent costs that have already been incurred and cannot be recovered. Therefore, options 1, 2, and 4 can be eliminated. Option 5 is also eliminated because the question is about costs that should be considered, and not about costs that should not be considered. Option 3, which includes the consideration of opportunity costs and the exclusion of sunk costs, is the best choice.

Triumph Incorporated Is Studying Whether to Expand Operations by Adding