1.”It provides the true financial cost of a product”. Could you explain how this is an advantage of LCC? I am actually a bit confuse because of the word “true”. Does true mean “accurate” in this context?
Yes, it means accurate (although it is a bit of a meaningless statement because other ways of costing could also claim to be accurate 🙂 I hope it is not one of my statements 🙂 )
Could you briefly explain what is meant by:
“Traditional capital budgeting techniques do not attempt to minimise the costs or maximise the revenues over the product life cycle”
Other techniques tend to look year by year instead of looking at costs and revenues over the entire life.
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