Description
A sunk cost is a cost that has already been incurred and thus cannot be recovered. A sunk cost differs from future costs that a business may face, recovered. A sunk cost differs from future costs that a business may face, such as decisions about inventory purchase costs or product pricing. Sunk costs are excluded from future business decisions, because the cost will be the same regardless of the outcome of a decision. When making business decisions, organizations consider relevant costs, which include the future cost and revenue of one choice compared with another. To make an informed decision, a business only considers the costs and revenue that will change as a result of the decision. Do you think this is how companies act in the real world?
Explanation & Answer
Attached.
Surname 1
Name:
Institution:
Instructor:
Date:
Market Analysis
Response 1
Yes, many businesses are only interested in the revenue they can generate and the
possible cost which might end up draining the business. When the management is making the
decisi...
Review
Review
24/7 Homework Help
Stuck on a homework question? Our verified tutors can answer all questions, from basic math to advanced rocket science!
Similar Content
Related Tags
Twelve Years A Slave
by Solomon Northrup
The Handmaids Tale
by Margaret Atwood
The Rhythm Section
by Mark Burnell
The Da Vinci Code
by Dan Brown
Big Magic
by Elizabeth Gilbert
The Sun Is Also a Star
by Nicola Yoon
Broke Millennial: Stop Scraping by and Get Your Financial Life Together
by Erin Lowry
The Outsiders
by S.E. Hinton
Into Thin Air
by Jon Krakauer