Which of the following statements about sunk costs is true?
A) Sunk costs do not differ between decision alternatives.
B) Sunk costs are the results of past decisions.
C) Sunk costs are never relevant to decisions, except for tax considerations.
D) All of the above

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered, and they do not vary between decision alternatives. They are indeed the result of past decisions and are generally not relevant to future decisions, except for potential tax implications, where they might affect taxable income through depreciation or amortization.

Which of the Following Statements About Sunk Costs Is True