An Example of a Sunk Cost in a Capital Budgeting

question 26

Multiple Choice

An example of a sunk cost in a capital budgeting decision for new equipment is ________.

• A) the initial investment in working capital
• B) the original price of an old equipment
• C) the necessary transportation costs on a new equipment
• D) the initial investment in a new equipment

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Definitions:

Rite

A ceremonial or solemn ritual, often associated with religious practices, symbolizing an important event or transition.

Nonentity

Something that does not exist or is considered unimportant or nonexistent in a particular context.

Milestone

A significant event or point in development, progress, or history that marks a specific achievement or phase.

Postmenopausal Women

Women who have gone through menopause, marking the end of their reproductive years, often experiencing hormonal changes affecting their health.