A(n)____ is a cash outlay that already has been incurred and that cannot be recovered regardless of whether the project is accepted or rejected.

Question

Quizplus · Accepted Answer

Sunk cost is the cash outlay that has already been spent and cannot be recovered. It is not affected by the acceptance or rejection of the project. Therefore, option A is the correct choice. Option B (opportunity cost) refers to the benefits foregone by choosing an alternative option. Option C (externality) refers to the impact of a project on other entities that are not directly involved in the project. Option D (incremental cash flow) refers to the difference in cash flows between two alternatives.

A(n)____ Is a Cash Outlay That Already Has Been Incurred