Arnold Kim began blogging about Apple products during his fourth year of medical school. Kim's website, MacRumors.com, became so successful that he decided to give up his medical career and work full time on his website, despite the nearly $200,000 he had invested in his education. In making his decision, the $200,000 he spent on his education
A) should be ignored since it represents a sunk cost.
B) should be considered since it is money he has spent and needs to recoup.
C) should be ignored only if Kim can earn more than $200,000 by running his website.
D) should be considered since it is money he could have used to invest in his website.

Question

Quizplus · Accepted Answer

The best choice is A because the $200,000 already spent on education represents a sunk cost, which is a cost that cannot be recovered and should be ignored in making future decisions. Kim's decision should be based on the potential future income and benefits of running his website, rather than trying to recoup his past educational costs.

Arnold Kim Began Blogging About Apple Products During His Fourth