debt cost
relevant cost
borrowing cost
embedded cost
Answer is Right!
Answer is Wrong!
The correct answer is: B. relevant cost
A relevant cost is a cost that is incurred in the decision-making process. It is a cost that will differ between the alternatives being considered. In this case, the marginal cost for raising a new debt is a relevant cost because it will differ between the alternatives of raising new debt or not raising new debt.
The other options are incorrect because:
- A debt cost is a cost that is incurred regardless of the decision that is made.
- A borrowing cost is a cost that is incurred when money is borrowed.
- An embedded cost is a cost that is not directly attributable to a particular decision.
I hope this helps! Let me know if you have any other questions.