Question 23 of 40
Q.What is meant by Sunk cost ?
Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2023Subjective· 2mImportance★★★★★
57% · 23/40 Questions
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Start your 14-day free trial to unlock the full solution →A sunk cost is a cost already incurred that cannot be recovered, so it is irrelevant to future decisions.
Meaning: A sunk cost is an expenditure that has already been made in the past and cannot be recovered or undone by any future course of action. It is "sunk" because the money is gone whether the firm continues, changes course, or shuts down.
Examples: money spent on a highly specialised machine that has no resale value, or expenditure already made on advertising and research.
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