Which of the following statements is most correct?
A) Sunk costs should be incorporated into capital budgeting decisions.
B) Opportunity costs should be incorporated into capital budgeting decisions.
C) Relevant externalities should be incorporated into capital budgeting decisions.
D) Answers b and c are correct.
E) Answers a, b, and c are correct.

Question

Quizplus · Accepted Answer

Opportunity costs and relevant externalities are important considerations in capital budgeting decisions as they affect the potential profitability and impact of a project. Sunk costs, however, are past costs that cannot be recovered and should not influence future decisions.

Which of the Following Statements Is Most Correct