A company spends $20 million researching whether it is possible to create a durable plastic from the process waste from feedstock preparation. How should the $20 million best be considered?

Question

Quizplus · Accepted Answer

The $20 million spent on research is a sunk cost, which refers to a cost that has already been incurred and cannot be recovered. Sunk costs should not be considered when making decisions about future investments, as they have already been spent and cannot be changed.

A Company Spends $20 Million Researching Whether It Is Possible