Sunk costs are not relevant for decisions based on incremental analysis.

Name: Sunk costs are not relevant for decisions based on incremental analysis.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. Therefore, they should not be considered in incremental analysis, which focuses on future costs and benefits of a decision. The decision should only be based on the additional costs and benefits that will result from the decision, not on costs that have already been incurred.

Sunk Costs Are Not Relevant for Decisions Based on Incremental