A sunk cost is
A)another term that means opportunity cost.
B)a term used to describe the cost of capital that the owners of a firm sink into their business.
C)the highest valued alternative that must be given up to engage in an activity.
D)a cost that has already been paid and cannot be recovered.

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been paid and cannot be recovered. It is not relevant to future decisions as it cannot be changed. It is important for decision-making to focus on future costs and benefits, not past ones.

A Sunk Cost Is