Tawstir Corporation has 800 obsolete personal computers that are carried in inventory at a total cost of $1,100,000. If these computers are upgraded at a total cost of $40,000, they can be sold for a total of $750,000. As an alternative, the computers can be sold in their present condition for $690,000.
-The sunk cost in this situation is:
A)$40,000
B)$750,000
C)$690,000
D)$1,100,000

Question

Quizplus · Accepted Answer

The sunk cost is the original cost of the computers, which is $1,100,000, as it has already been incurred and cannot be recovered.

Tawstir Corporation Has 800 Obsolete Personal Computers That Are Carried