Sunk cost is a cost that has already been incurred and cannot be changed by any decision made now or in the future. Because sunk costs cannot be changed by any decision, they are not differential costs. Therefore, sunk costs should not be ignored when making a decision.

Question

Quizplus · Accepted Answer

Sunk costs should indeed be ignored when making decisions because they cannot be recovered or changed, and decisions should be based on future costs and benefits, not on costs that have already been incurred.

Sunk Cost Is a Cost That Has Already Been Incurred