During planning period, a marginal cost for raising a new debt is classified as

debt cost
relevant cost
borrowing cost
embedded cost

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.

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