A sunk cost is
A)the cost for drilling certain types of wells, such as a well for water.
B)a past cost that cannot be recovered.
C)a cost that is highly relevant for decision-making.
D)an opportunity cost.

Question

Quizplus · Accepted Answer

A sunk cost is a past cost that cannot be recovered, regardless of the decision made. It is not relevant for decision-making because it has already been incurred and cannot be changed. Therefore, it should not be considered when making future business decisions.

A Sunk Cost Is