Sunk costs:
A)cannot be estimated accurately.
B)represent an initial period of cash flow of a capital budgeting project.
C)have been incurred in prior periods.
D)None of the above

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred in prior periods and cannot be recovered. Therefore, option C is the correct choice. Option A is incorrect because sunk costs can be accurately estimated based on historical data. Option B is incorrect because it refers to the initial cash flows of a project, which are not necessarily sunk costs. Option D is incorrect because there is a correct choice.

Sunk Costs