The proper way to analyze the decision to drop a product line is to compare sunk costs to incremental costs.

Question

Quizplus · Accepted Answer

The proper way to analyze the decision to drop a product line is to compare future costs and benefits, not sunk costs to incremental costs. Sunk costs are irrelevant in this decision because they are costs that have already been incurred and cannot be recovered. The focus should be on the incremental costs and benefits that would result from dropping the product line.

The Proper Way to Analyze the Decision to Drop a Product