Money that a firm has already spent or committed to spend regardless of whether a project is taken is called:
A) Fixed cost
B) Opportunity cost
C) Sunk cost
D) None of the above

Question

Quizplus · Accepted Answer

Sunk cost refers to money that has already been spent and cannot be recovered, regardless of whether the project is pursued or not. Fixed cost refers to expenses that remain constant, regardless of the level of production or sales, and opportunity cost is the cost of the next best alternative that must be given up in order to pursue a certain action. None of these options accurately describe the scenario presented in the question.

Money That a Firm Has Already Spent or Committed to Spend