Explain The Meaning Of Sunk Costs?

1.	Explain The Meaning Of Sunk Costs?
Answer» Historical costs INCURRED in the past are known as sunk costs. They play no role in DECISION making in the CURRENT period. For example, in the case of a decision relating to the replacement of a machine the WRITTEN down VALUE of the existing machine is a sunk cost . Historical costs incurred in the past are known as sunk costs. They play no role in decision making in the current period. For example, in the case of a decision relating to the replacement of a machine the written down value of the existing machine is a sunk cost .

Answer»

Historical costs INCURRED in the past are known as sunk costs. They play no role in DECISION making in the CURRENT period. For example, in the case of a decision relating to the replacement of a machine the WRITTEN down VALUE of the existing machine is a sunk cost .

Historical costs incurred in the past are known as sunk costs. They play no role in decision making in the current period. For example, in the case of a decision relating to the replacement of a machine the written down value of the existing machine is a sunk cost .

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