cost concept with example

Define cost concept
Cost concept with example
Solution:-
Before taking any decision management has to first analyze the relevant costs and
revenues associated with the project. Relevant costs are those costs that would occur in future
and will be changed by changing the decision whereas irrelevant costs are those future costs
which will not change by changing decision, irrelevant cost will remain same in each alternative.
In other words, relevant cost and expenses are future cash flows that differ between the
alternatives considered.
Further cost can be classified as sunk cost, irrelevant cost, opportunity...