A sunk cost is
A)a cost that may be saved by not adopting an alternative.
B)a cost that may be shifted to the future with little or no effect on current operations.
C)a cost that cannot be avoided because it has already been incurred.
D)a cost which does not entail any pound outlay but which is relevant to the decision-making process.

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been incurred and cannot be recovered or avoided. Therefore, it should not be taken into consideration when making a decision about future investments or actions. Failing to consider sunk costs can lead to irrational decision-making.

A Sunk Cost Is