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Question
As part of its expansion project, A.J. Industries Equipment Division has expanded its office space by 200 square feet. The company's administrative overhead is allocated based on the square footage of each business segment. Although the total administrative overhead for the company will remain the same, the Equipment Division will be charged more for administrative overhead. For the Equipment Division expansion project, the administrative overhead is an example of a(n)A) incremental cash flow.
B) sunk cost.
C) opportunity cost.
D) incremental opportunity cash flow.
Answer
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