Which of the following defines a sunk cost?
A)Cost of the next best alternative
B)Cost of producing an additional unit
C)An asset with no scrap value
D)Total cost of producing a product

Question

​Which of the following defines a sunk cost?
A)​Cost of the next best alternative
B)Cost of producing an additional unit
C)An asset with no scrap value
D)​Total cost of producing a product

Quizplus · Accepted Answer

A sunk cost is a cost that has already been incurred and cannot be recovered, such as an asset with no scrap value. Option A refers to opportunity cost, B refers to marginal cost, and D refers to total cost which includes variable costs that can still be recovered.

​Which of the Following Defines a Sunk Cost

Which of the Following Defines a Sunk Cost