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IMANET CMA Exam - 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

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Isidra

8 months ago

Nope, definitely not sunk costs! It's about what changes.

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Kathrine

8 months ago

Really? I thought differential costs were just sunk costs.

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Sabina

9 months ago

Wait, isn't it more about opportunity costs?

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Tasia

9 months ago

Totally agree, it's all about the costs that vary!

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Jerilyn

9 months ago

Differential cost refers to costs that change among alternative courses of action.

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Tandra

9 months ago

I'm pretty confident that differential cost is not a sunk or fixed cost, so that rules out A and B. I think D makes the most sense here.

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Erick

9 months ago

I keep mixing up differential cost with opportunity cost. I feel like they overlap, but I can't recall which one is which in this context.

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Kate

9 months ago

I remember practicing a question similar to this, and I think the answer was about costs that vary with different choices. So, I might lean towards option D.

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Carolynn

9 months ago

I think differential cost refers to costs that change between different options, but I'm not entirely sure if that's the right definition.

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Viola

9 months ago

Okay, let's see. HTTP, RESTful, and Web Service are all common protocols used in cloud computing, so those are probably not the answer. PPPoE is more for traditional internet connections, so that's my best guess.

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Sherrell

10 months ago

Okay, I've got an idea. The "ref_contributions" attribute must be related to field decorations somehow. I'll try to reason through the true/false options.

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Holley

10 months ago

I remember studying something about code versions in our last session, but I feel like it wasn't the main factor for the primary key server selection.

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Theola

1 year ago

Differential cost, huh? Sounds like something you'd find in a physics lab, not a decision-making process. Well, I'm going with D. Might as well roll the dice on this one!

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Ettie

1 year ago

I agree, D) Cost that changes among alternative courses of action.

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Rosendo

1 year ago

I'll go with D) Cost that changes among alternative courses of action.

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Lorrine

1 year ago

I'm going with A) Sunk cost of alternative courses of action.

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Nicholle

1 year ago

I think it's C) Opportunity cost of alternative courses of action.

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Davida

1 year ago

I'm not sure, but B) Fixed cost of alternative courses of action sounds right to me.

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Viola

1 year ago

I agree with D) Cost that changes among alternative courses of action.

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Tammi

1 year ago

I'm going with A) Sunk cost of alternative courses of action.

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Hyun

1 year ago

I think it's C) Opportunity cost of alternative courses of action.

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Gladys

1 year ago

Ooh, this is a good one. I was tempted by the opportunity cost angle, but I think the correct answer is D. The cost that changes among the alternatives.

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Marshall

1 year ago

Yeah, I was also considering opportunity cost, but D makes more sense.

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Monroe

1 year ago

I agree, it's definitely the cost that changes among the alternatives.

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Micheal

1 year ago

Easy peasy! Differential cost is the cost that changes depending on the decision made. Gotta go with D on this one.

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Ressie

1 year ago

Hmm, I think this is a tricky one. Differential cost is the cost that varies between alternative courses of action, so I'm going with option D.

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Jeannine

1 year ago

I'm not sure about this one, but I think option A might also be a possibility.

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Eleonore

1 year ago

I see where you're coming from, but I still think option D is the best choice.

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Fairy

1 year ago

I think it's actually option C, which is the opportunity cost of alternative courses of action.

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Glory

1 year ago

I agree with you, option D is correct. It's the cost that changes among alternative courses of action.

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Jenelle

1 year ago

I'm not sure, but I think it might be D) Cost that changes among alternative courses of action.

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Shizue

1 year ago

I agree with Dottie, because differential cost is about the cost that changes among alternative courses of action.

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Dottie

1 year ago

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

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