Question

A sunk cost is a cost that:

A. has been incurred and cannot be eliminated.
B. is never relevant in decision-making.
C. is never a differential cost.
D. all of the above

Answer 1

d. A sunk cost is a cost that has already been incurred, cannot be recovered, and is not relevant in future decision-making, thus satisfying all the given options.

Step-by-step explanation:

A sunk cost is a cost that: A. has been incurred and cannot be eliminated. B. is never relevant in decision-making. C. is never a differential cost. D. all of the above. The correct answer is D. all of the above.

Sunk costs are costs that have already occurred and cannot be recovered, and as such, they are not relevant for future business decisions. These costs should not influence the decision-making process, as decisions should be based on what will happen in the future rather than what has already been spent.