Which one of the following should be excluded from the analysis of a project?
A)Erosion costs
B)Incremental fixed costs
C)Incremental variable costs
D)Sunk costs
E)Opportunity costs

Question

Quizplus · Accepted Answer

Sunk costs are irrelevant to decision making as they have already been incurred and cannot be recovered or changed by the decision to proceed with a project. All other costs listed (erosion costs, incremental fixed costs, incremental variable costs, opportunity costs) should be included in the analysis.

Which One of the Following Should Be Excluded from the Analysis