Select the incorrect statement regarding sunk costs.
A) Sunk costs cannot be avoided.
B) Sunk costs are relevant if they differ among the alternatives.
C) Sunk costs are costs that have been incurred in past transactions.
D) Sunk costs include historical costs such as equipment acquisition costs.

Question

Quizplus · Accepted Answer

Sunk costs are irrelevant in decision making as they are costs that have already been incurred and cannot be recovered or avoided. Therefore, they should not be considered when making future decisions.

Select the Incorrect Statement Regarding Sunk Costs