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Oct 19, 2021 · The sunk cost definition is money your business already spent and cannot recover. With sunk costs, a business cannot sell what it purchased to recoup the costs. For example, purchasing a machine to manufacture goods is a sunk cost because the business cannot resell the machine to recover the full cost of purchasing it.
Definition: A sunk cost, also known as a stranded cost, is an expense that has already occurred and can’t be changed or avoided. In other words, it’s a cost that has already been paid and can’t be refunded or reduced. It’s in the past and has no bearing on any future decision making processes.
Apr 18, 2022 · Definition. A sunk cost is defined as "a cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business may...
Jan 31, 2024 · A variable cost is a type of cost that fluctuates as volume changes. Sunk costs are costs that have already been incurred and cannot be avoided or changed. So, sunk costs are not relevant in decision-making situations; they will not change depending on the decision made (they are already completed). Variable costs are only relevant in the ...
Nov 3, 2016 · In business speak, a sunk cost is a payment or investment that has already been made. It can't be recovered and therefore shouldn't be a factor in decisions moving forward because no matter what, it can't be recouped.
Definition of Sunk Cost. A sunk cost is a cost that was incurred in the past and cannot be undone. Since most transactions cannot be undone, most amounts spent in the past are sunk. A past or sunk cost will be there regardless of what is decided today or in the future.
In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. [1] [2] Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. [3] .
