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Which of the following is false?

a. relevant information always differs among alternatives
b. relevant information always regards the future
c. relevant information is always financial in nature.
d. sunk costs are never relevant to a decision

User Tubs
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1 Answer

3 votes

Final answer:

The false statement is that relevant information is always financial. Relevant information includes both financial and non-financial data that can influence future decisions, and sunk costs should not be considered as they are past expenses that cannot be recovered.

Step-by-step explanation:

The statement that is false among the given options is: c. relevant information is always financial. While relevant information often involves financial data, it can also include non-financial information that affects decision-making, such as time, personnel, or strategic positioning. Relevant information typically pertains to information that will affect the future, as past costs, known as sunk costs, are considered irrelevant since they cannot be recovered and should not impact current decisions.

Moreover, relevant information may differ among alternatives, reflecting the fact that different options can have unique costs and benefits. The concept that additional marginal gains tend to become smaller is related to the law of diminishing returns in economics, which applies to scenarios where the incremental benefit gained from a unit of input decreases as more of that input is used.

User Manu Lakaster
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