In making a decision regarding whether or not to sell a tract of land,the purchase price of the land is a(n):
A)incremental cost
B)opportunity cost
C)relevant cost
D)sunk cost

Question

Quizplus · Accepted Answer

The purchase price of the land is a sunk cost because it is a cost that has already been incurred and cannot be recovered, regardless of whether the land is sold or not. Sunk costs are not considered in making future economic decisions.

In Making a Decision Regarding Whether or Not to Sell