Rachel is deciding whether to remain in the home she has lived in for the past ten years,which is located very near her work,or to move into a newer home that is located in the suburbs further from her job.The old house was purchased for $160,000 and has a market value of $220,000.The new home can be purchased for $285,000.Which of the following is not relevant to Rachel's decision?

Question

Quizplus · Accepted Answer

Historical costs,such as the cost of the old house,are frequently called sunk costs.Since sunk costs have been incurred in past transactions,they cannot be changed and are not relevant for making current decisions.

Rachel Is Deciding Whether to Remain in the Home She