Which of the following statements is false?
A) Because value is lost when a resource is used by another project, we should include the opportunity cost as an incremental cost of the project.
B) Sunk costs are incremental with respect to the current decision regarding the project and should be included in its analysis.
C) Overhead expenses are associated with activities that are not directly attributable to a single business activity but instead affect many different areas of the corporation.
D) When computing the incremental earnings of an investment decision, we should include all changes between the firm's earnings with the project versus without the project.

Question

Quizplus · Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered regardless of whether the project is undertaken or not. Therefore, they should not be included in the analysis of the project's incremental costs. All other statements are true.

Which of the Following Statements Is False