A sunk cost is A. a past cost that cannot be recovered. B. the cost for drilling certain types of wells, such as a well for water. C. a cost that is highly relevant for decisionminusmaking. D. an opportunity cost.

Question

Business

Jefferson Burton

3 April, 01:18

A sunk cost is A. a past cost that cannot be recovered. B. the cost for drilling certain types of wells, such as a well for water. C. a cost that is highly relevant for decisionminusmaking. D. an opportunity cost.

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Answers (2)

Know the Answer?

Adyson Ingram · Answer 1

The correct answer is letter "A": a past cost that cannot be recovered.

Explanation:

Sunk costs are incurred in the past, irrespective of future events, and can not be recovered. Economists teach that sunk costs should not be taken into account when making a financial decision. Instead, the decision-makers should consider only future costs.

Will Burton · Answer 2

A. a past cost that cannot be recovered

Explanation:

A sunk cost is an irrecoverable cost or money that has been incurred or paid, such cost is not to be given though to especially when making future business decisions because it cannot be recovered.

Sunk cost can be calculated as purchase of materials minus the depreciation or usage