If a firm has already paid an expense or is obligated to pay one in the future, regardless of whether a particular project is undertaken, that expense is a
A) committed cost.
B) complementary cost.
C) obligated cost.
D) sunk cost.

Question

Quizplus · Accepted Answer

A sunk cost refers to money that has already been spent or committed to spending in the future, and cannot be recovered, regardless of whether a project proceeds.

If a Firm Has Already Paid an Expense or Is