Which of the Following Is the Best Definition for Sunk

question 176

Multiple Choice

Which of the following is the best definition for sunk cost?

• A) Depreciation method under Canadian tax law allowing for the accelerated write-off of property under various classifications.
• B) A cost that has already been incurred and cannot be removed and therefore should not be considered in an investment decision.
• C) Evaluation of a project based on the project's incremental cash flows.
• D) Financial statements projecting future years' operations.
• E) The most valuable alternative that is given up if a particular investment is undertaken.

---

Definitions:

Cyclohexanone

A six-carbon cyclic ketone with the molecular formula C6H10O, characterized by a ring structure with a ketone functional group.

Cyclopentanone

A cyclic ketone with the formula C5H8O, characterized by a five-membered ring structure; it's a common intermediate in the synthesis of more complex organic molecules.

Acetic Acid

A colorless liquid organic compound with the chemical formula CH3COOH, commonly known as the main component of vinegar after water.

Lithium Enolate

A reactive species derived from the deprotonation of a carbonyl compound by lithium, used in organic synthesis.