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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Concerning chapter 12a Capital expenditure budgeting on page 91 BPP book
This chapter only have four questions in the bpp book but some of the words seems very unfamiliar to me. I have not watch any lecture that included an explanation on sunk cost and relevant cost nor can i find them in the notes. How do i deal with the questions?
These terms are more relevant to Paper PM than to Paper MA.
Relevant costs are the future extra cash flows resulting from doing a project.
Sunk costs are costs that have already been spent and are therefore irrelevant to the decision.