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Quiz1-Chapter10
Quiz1-Chapter10
4
Finance
Graduate
08/21/2013
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Term
Sunk Cost:
 Definition
A cost that has already been incurred and cannot be removed and therefore should not be considered in an investment decision.
Term
Opportunity Cost:
 Definition
The most valuable alternative that is given up if a particular investment is undertaken
Term
Free Cash Flow:
 Definition
Change in net working capital. Look for USE of SOURCE of Cash
Term
Accelerated cost recovery system(ACRS)
 Definition
A depreciation method under US Tax Law allowing for the accelerated write-off of property under various classifications.
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