Which of the following is an example of a sunk cost?
A) Overhead costs that are associated with a project
B) Interest expense associated with a project
C) Market study expenses incurred in order to decide if a firm should accept a project
D) Depreciation expenses associated with a project

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. Market study expenses incurred to decide if a firm should accept a project are an example of sunk costs because these costs have been spent regardless of whether the project proceeds.

Which of the Following Is an Example of a Sunk