A company owns a building that is totally paid for. This building has been sitting idle for the past three years. Now the company is trying to analyze a project that would include the use of this building. Therefore, the property taxes paid on the building over the past three years should be included in that analysis.

Question

Quizplus · Accepted Answer

The property taxes paid on the building over the past three years are considered sunk costs and should not be included in the analysis of a new project, as they cannot be recovered or changed by the new project decision.

A Company Owns a Building That Is Totally Paid For This