An example of a sunk cost is
A)the purchase price of new equipment being considered for purchase.
B)maintenance costs of new equipment.
C)the cost of installation of the new equipment.
D)the purchase price of the old equipment.

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. The purchase price of the old equipment is a sunk cost because the business has already paid for it and cannot get that money back. The other choices are potential future costs that have not yet been incurred and therefore are not sunk costs.

An Example of a Sunk Cost Is