CFA Practice Question

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CFA Practice Question

You've purchased a car for $10,000 and now are deciding whether to have a moon roof installed for $400 and a security system installed for $200. The marginal cost of adding both the moon roof and security system is ______.
Correct Answer: $600

The marginal cost is the additional cost over and above the costs already incurred. The $10,000 price of the car should not be included in the marginal cost calculation since it is a sunk cost.

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