An example of a sunk cost is a. maintenance costs of new equipment b. the cost...
An example of a sunk cost is
a. maintenance costs of new equipment
b. the cost of installation of the new equipment
c. the purchase price of the old equipment
d. the purchase price of new equipment being considered for purchase
Homework Answers
Answer: c. the purchase price of the old equipment
Sunk cost is a cost which cannot be recovered.They are past opportunity costs which irretrievable and irrelevant for decision making.The cots have no current bearing on future decisions.
Purchase [rice of old equipment is a past cost which are no recoverable..have no benefit and are of no use in decision making.
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