Answer the following questions using the information below:
Pizza For Everyone is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow:

-Sunk costs include:
A)the original cost of the existing van
B)the original cost of the new van
C)the current salvage value of the existing van
D)the annual operating cost of the new van

Question

Answer the following questions using the information below:
Pizza For Everyone is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow:
 
-Sunk costs include:
A)the original cost of the existing van 
B)the original cost of the new van 
C)the current salvage value of the existing van 
D)the annual operating cost of the new van

Quizplus · Accepted Answer

Sunk costs are past costs that have already been incurred and cannot be recovered. The original cost of the existing van is a sunk cost because it has already been spent and cannot be changed by any future decision.

Answer the Following Questions Using the Information Below