A cash outlay that has already been committed whether a project is accepted or not is known as a:

Question

Quizplus · Accepted Answer

A sunk cost is a cash outlay that has already been incurred and cannot be recovered, regardless of whether the project is accepted or not. It is not relevant to the decision-making process and should not be taken into account when deciding whether to continue with the project or not. Option A (opportunity cost) refers to the value of the next best alternative foregone, option B (terminal value) refers to the value of an asset at the end of its useful life, and option C (net cost) does not accurately describe the concept being asked for.

A Cash Outlay That Has Already Been Committed Whether a Project