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(n)

Question

Quizplus · Accepted Answer

Sunk costs are past costs that have already been incurred or are obligated to be paid in the future and cannot be recovered. They are not relevant to the decision-making process for a new project because they will remain the same whether or not the project is undertaken.

If a Firm Has Already Paid an Expense or Is