IMANET Exam CMA Topic 1 Question 64 Discussion

Actual exam question for IMANET's CMA exam

Question #: 64
Topic #: 1

[All CMA Questions]

In the decision making process, differential cost is a (n)

ASunk cost of alternative courses of action.

BFixed cost of alternative courses of action.

COpportunity cost of alternative courses of action.

DCost that changes among alternative courses of action.

Show Suggested Answer

Suggested Answer: B

The net initial investment for a capital project consists of three components: the purchase of new equipment, the increase in working capital, and the after-tax proceeds from the disposal of old equipment For this company, the first of these is $54,000 ($50,000 + $4,000), and the second is $1,000. The calculation of the after-tax proceeds from the disposal of the old equipment is as follows:

by Erick at Jan 04, 2023, 12:29 PM

Limited Time Offer

25%

14 days ago

I think the answer is C) Opportunity cost of alternative courses of action.

upvoted 0 times

...