Good Earth, a company manufacturing packaged food products, sets up its stores in Baltonia. However, a year later, the company closes the store down due to high operating costs. In such a scenario, the money spent in paying for the rent of the store in Baltonia would be an example of _____ costs.

Question

Quizplus · Accepted Answer

Sunk cost is money that has been spent in the past. When deciding what projects to invest in or continue, one should not include sunk costs.

Good Earth, a Company Manufacturing Packaged Food Products, Sets Up