A cost is sunk if it
A)is not an incremental cost.
B)is unavoidable.
C)has already been incurred.
D)is irrelevant to the decision at hand.

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been incurred and cannot be recovered. It is not relevant to current decision-making because it cannot be changed or avoided. Therefore, option C is the correct answer. Options A and B are not necessarily true for all sunk costs, and option D is a vague statement that does not accurately describe sunk costs.

A Cost Is Sunk If It