relevant costs/revenues

relevant costs/revenues
Fin
costs and revenues appropriate to a specific management decision. These are represented by future cash flows whose magnitude will vary depending upon the outcome of the management decision made. If stock is sold by a retailer, the relevant cost, used in the determination of the profitability of the transaction, would be the cost of replacing the stock, not its original purchase price, which is a sunk cost. Abandonment analysis, based on relevant cost and revenues, is the process of determining whether or not it is more profitable to discontinue a product or service than to continue it.

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