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Sunk costs are past costs. True False

Sunk costs are past costs.

True

False

Business   Accounting   
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Answer #1

Answer:

The given statement is True.

Explanation:

Sunk costs are costs incurred in the past, which can not be recovered in the future.

These cost are irrecoverable and are considered irrelevant for decision making while considering any future business projects or investments.

Examples of sunk costs are rent expenses, salary expenses, advertisement expenses, research expenses etc.

That is why sunk cost are also referred as past costs.

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