Asked by Morgan Burroughs on Apr 30, 2024
Verified
Sunk costs are irrelevant in making decisions.
Sunk Costs
Sunk costs are past expenditures that cannot be recovered and should not affect future business decisions since they remain the same regardless of the outcome.
- Comprehend the importance of opportunity costs, sunk costs, and differential costs in the process of making decisions.
Verified Answer
PA
Prince Ababio
May 06, 2024
Final Answer :
True
Explanation :
Sunk costs have already been incurred and cannot be recovered. Therefore, they should not be considered in decision making as they cannot be changed. Decisions should be made based on future costs and benefits.
Learning Objectives
- Comprehend the importance of opportunity costs, sunk costs, and differential costs in the process of making decisions.