Asked by Kibre Dubiso on Jul 01, 2024
Verified
Which of the statements below is correct about sunk costs
A) Sunk costs are relevant to long-run decisions but not to short-run decisions.
B) Sunk costs acts as a substitute for opportunity costs.
C) Sunk costs are always relevant to decision making.
D) Sunk costs are not relevant to decision making.
Sunk Costs
Expenses that have already been incurred and cannot be recovered or altered by future actions or decisions.
Long-Run Decisions
Decisions in business or economics that affect operations over a longer time period, often related to investment, expansion, or strategic planning.
Short-Run Decisions
Decisions made by businesses affecting operations within a period of less than one year, often focusing on immediate operational and financial outcomes.
- Absorb the concept of necessary expenditures for informed decision-making.
Verified Answer
Learning Objectives
- Absorb the concept of necessary expenditures for informed decision-making.
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