For which of the following decisions are sunk costs relevant?
A) the decision to keep an old machine or buy a new one.
B) the decision to sell a product at the split-off point or after further processing.
C) the decision to accept or reject a special order offer.
D) all of these.
E) none of these.

Question

Quizplus · Accepted Answer

Sunk costs are past costs that have already been incurred and cannot be recovered. They are not relevant to future decision-making, including the decisions listed in options A, B, and C.

For Which of the Following Decisions Are Sunk Costs Relevant