One of Maersk cargo ships hit an iceberg and sank. In deciding whether or not to salvage the ship, its book value is a(n)
A)relevant cost.
B)discretionary cost.
C)opportunity cost.
D)sunk cost.

Question

Quizplus · Accepted Answer

The book value of the sunken ship is a sunk cost, which is a cost that has already been incurred and cannot be recovered. Therefore, it is not relevant in the decision to salvage the ship.

One of Maersk Cargo Ships Hit an Iceberg and Sank