Question

Which statement describes a relevant cost?

A: A Future cost that stays the same between alternatives
B: A Past cost that differs between alternatives
C: A Past cost that stays the same between alternatives
D: A Future cost that differs between alternatives

Answer 1

A relevant cost is a future cost that differs between alternatives and directly affects the decision being made.

Step-by-step explanation:

A relevant cost is a future cost that differs between alternatives. It is a cost that is directly affected by the decision being made and will change based on the choice made. This cost is important in decision-making as it helps evaluate the financial impact of different options.