When considering whether to have a new roof installed on a building, the money spent previously on roof repairs to the old roof is information that is relevant to the business decision.

Question

Quizplus · Accepted Answer

The money spent on previous roof repairs is a sunk cost and should not affect the decision to install a new roof, as it cannot be recovered and does not impact future costs or benefits.

When Considering Whether to Have a New Roof Installed on a Building