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QUESTION 16 Which of these would NOT be a valid cost to include as part of...

QUESTION 16

  1. Which of these would NOT be a valid cost to include as part of the ICO?

    installation and testing

    the catalog price of the asset

    the cost of research and development for the project

    the training of workers to use the new asset
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Answer #1

The research and development cost is not to be included in the total cost of ICO because these are sunk cost which have already been incurred and they are completely relevant for any kind of decision making.

so, the research and development cost is not to be considered because these are sunk cost and irrelevant for decision making as they are not relevant cost.

installation and testing cost and the catalogue price and the training cost are to be included as there is related specifically to the use of the asset.

So the answer would be option( C)the cost of research and development for the project.

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