The reason for not considering the sunk cost in capital budgeting analysis and for considering the opportunity cost and externalities. Introduction: Sunk Cost: The cost that is not based on the acceptance or rejection of a decision is called sunk cost. It is an already incurred cost before taking decision about the project and can’t be adjusted or recovered. Opportunity Cost: The loss of estimated income due to the rejection of a project is known as opportunity cost. It is considered as an important factor for capital budgeting decisions. Externalities: The cost to eliminate the effect of an alternative on other parties that are not involved in the decision making is called externalities cost. It is considered along with other factors, to accept or reject an alternative.

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Article: Current Bank Problem Statement The general problem to be surveyed is that leaders lack an understanding of how to address job demands, resulting in an increase in voluntary termination, counterproductive workplace outcomes, and a loss of customers. Bank leaders discovered from customer surveys that customers are closing accounts because their rates are not competitive with area credit unions. Job demands such as a heavy workload interfered with employee performance, leading to decreased job performance. Healthcare employees who felt the organization’s benefits were not competitive were more likely to quit without notice, resulting in retention issues for the organization. Information technology leaders who provide job resources to offset job demand have seen an increase in (a) new accounts, (b) employee productivity, (c) positive workplace culture, and (d) employee retention. The specific problem to be addressed is that IT technology leaders in the information technology…

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Chapter 12, Problem 2Q

Summary Introduction

To explain: The reason for not considering the sunk cost in capital budgeting analysis and for considering the opportunity cost and externalities.

Introduction:

Sunk Cost:

The cost that is not based on the acceptance or rejection of a decision is called sunk cost. It is an already incurred cost before taking decision about the project and can’t be adjusted or recovered.

Opportunity Cost:

The loss of estimated income due to the rejection of a project is known as opportunity cost. It is considered as an important factor for capital budgeting decisions.

Externalities:

The cost to eliminate the effect of an alternative on other parties that are not involved in the decision making is called externalities cost. It is considered along with other factors, to accept or reject an alternative.

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Article: Current Bank Problem Statement The general problem to be surveyed is that leaders lack an understanding of how to address job demands, resulting in an increase in voluntary termination, counterproductive workplace outcomes, and a loss of customers. Bank leaders discovered from customer surveys that customers are closing accounts because their rates are not competitive with area credit unions. Job demands such as a heavy workload interfered with employee performance, leading to decreased job performance. Healthcare employees who felt the organization’s benefits were not competitive were more likely to quit without notice, resulting in retention issues for the organization. Information technology leaders who provide job resources to offset job demand have seen an increase in (a) new accounts, (b) employee productivity, (c) positive workplace culture, and (d) employee retention. The specific problem to be addressed is that IT technology leaders in the information technology…

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