Sunk costs are

Name: Sunk costs are
Brand: Quizplus
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Question

Sunk costs are

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. They are not relevant in capital budgeting decisions because they have no impact on future cash flows or the profitability of a project. Therefore, they should not be considered when making investment decisions. Choices A, B, and D are incorrect because sunk costs are not recoverable, are not incremental, and are not deductible for tax purposes.

Sunk Costs Are