Question

Good Earth, a company manufacturing packaged food products, sets up its stores in Baltonia. However, a year later, the company closes the store down due to high operating costs. In such a scenario, the money spent in paying for the rent of the store in Baltonia would be an example of?

Answer 1

Answer: sunk cost

Explanation:

In business, sunk cost refer to money that has already been spent and cannot be recovered such as payment for rent, production machineries etc.