Which of the following would be an example of a sunk cost?
A)The cost of a new oil burner that replaced a destroyed one
B)The cost of an old inefficient oil burner that will be replaced by a more modern and efficient one
C)Depreciation expense
D)Lost revenue from a bad debt

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. The cost of the old inefficient oil burner that will be replaced is a sunk cost because it has already been spent and cannot be recovered regardless of future actions.

Which of the Following Would Be an Example of a Sunk