Final answer:
Statement (1) is false as non-quantifiable factors can be critical in business decisions; statement (2) is true since sunk costs should not affect decisions. Hence, the answer is C. False True.
Step-by-step explanation:
When assessing the validity of statements regarding business decisions, we often refer to economic concepts such as quantifiable economic impact and sunk costs. Statement (1) is False because factors that have no quantifiable economic impact can still be significant. These may include ethical considerations, brand reputation, or employee morale and can critically influence business decisions. Statement (2) is True, as this aligns with the concept that future costs that do not vary with the decision should indeed be ignored when making business decisions because they are considered sunk costs. Sunk costs are expenses that have already been incurred and cannot be recovered, and according to the budget constraint framework, should not influence future choices as they will remain the same regardless of the decision. Therefore, the correct answer is C. False True.