Which one of the following is the definition of a sunk cost?

A sunk cost, sometimes called a retrospective cost, refers to an investment already incurred that can’t be recovered. Examples of sunk costs in business include marketing, research, new software installation or equipment, salaries and benefits, or facilities expenses.

What is the definition of a sunk cost quizlet?

(1) Sunk costs (A sunk cost is a cost that has already been incurred and cannot be avoided regardless of what a manager decides to do.) For example, the purchase price of equipment is a sunk cost. (2) Future costs that do not differ between the alternatives. Hint: A fixed cost is not always an irrelevant cost.

Which of the following is an example of sunk cost?

A sunk cost is a cost that has already been spent but is not recoverable in any case, and future business decisions should not be affected by past spending. Spending on research, equipment, or machinery buying, rent, payroll, marketing, or advertising is the main example of sunk cost.

Which one of the following is an example of a sunk cost quizlet?

A good example of a sunk cost is money that a banking corporation spent last year to investigate the site for a new office, then expensed that cost for tax purposes, and now is deciding whether to go forward with the project.

What is an example of the sunk cost fallacy?

For example, individuals sometimes order too much food and then over-eat just to “get their money’s worth”. Similarly, a person may have a $20 ticket to a concert and then drive for hours through a blizzard, just because she feels that she has to attend due to having made the initial investment.

Which item is not an example of a sunk cost?

Answer and Explanation: The laptop is not a sunk cost because it has some resale value.

What do you mean by sunk?

Sunk is the past participle of sink. 2. adjective [verb-link ADJECTIVE] If you say that someone is sunk, you mean that they have no hope of avoiding trouble or failure.

Which of the following is an example of a sunk cost as it relates to a firm?

(Consider This) Which of the following is an example of a sunk cost, as it relates to a firm? An expenditure on a nonrefundable, nontransferable airline ticket.

Which of the following statements describes sunk costs Select the best answer?

Which of the following statements best describes sunk costs? The answer is: c. A sunk cost is a cost that was incurred and expensed in the past and… See full answer below.

Which of the following statements is correct A good example of a sunk cost?

e. A good example of a sunk cost is a situation where Home Depot opens a new store, and that leads to a decline in sales of one of the firm’s existing stores.

What are sunk costs chegg?

Sunk Costs Definition
Sunk cost is a type of cost that has already been incurred in a business and is known to be unrecoverable. However, sunk costs should not be considered when making future decisions as it will lead to making inappropriate choices.

How do you find sunk cost?

Do you keep working and finish the construction, hoping that the market will soon improve? Or, do you stop work and save the money you would have spent finishing all the homes? At the point in time where you make this decision, everything you’ve spent so far is sunk cost.

How do you get sunk cost?

Subtract the current value from the as-new price to find the sunk cost. To calculate the sunk cost of a project, list all equipment and/or tools that can’t be sold or reused. Find the purchase price and its current value to identify depreciation. Then assign a sunk cost.

Is fixed cost a sunk cost?

Sunk costs and fixed costs are two different types of costs. A sunk cost is always a fixed cost because it cannot be changed or altered. A fixed cost, however, is not a sunk cost, because it can be stopped, for example, in the sale or return of an asset.

What is sunk cost Mcq?

Sunk Cost is that cost which is already spent. Once it is incurred, it can not be recovered. Since it is already spent, its irrelevant in decision making.

Which of the following is an example of a sunk cost in media production?

Sunk costs are costs that cannot be recovered. Of these examples, the only cost that the consumer cannot get back is the cost of the movie ticket. In this case, regardless of whether or not Chris enjoys the film, he is not able to get his money back since the ticket is purchased upfront.

What is sunk cost essay?

A sunk cost is a cost that has already occurred and cannot be recovered by any means. Sunk costs are independent of any event and should not be considered when making investment or project decisions.

What is the difference between a sunk cost and an opportunity cost quizlet?

An opportunity cost is the benefit that is lost when rejecting some course of action. A sunk cost is a cost that has already been incurred and that cannot be changed by any future decision.

Are all fixed costs sunk costs?

In accounting, finance, and economics, all sunk costs are fixed costs. However, not all fixed costs are considered to be sunk. The defining characteristic of sunk costs is that they cannot be recovered.

How can a sunk cost be recovered quizlet?

A sunk cost is any cost that was expended in the past but can be recovered if the firm decides not to go forward with the project.

What is an opportunity cost quizlet?

opportunity cost. the most desirable alternative given up as the result of a decision. thinking at the margin. the process of deciding whether to do or use one additional unit of some resource.

What is opportunity cost defined as?

“Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up,” explains Andrea Caceres-Santamaria, senior economic education specialist at the St.

What is opportunity cost Mcq?

The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions.