When Is It Appropriate to Include Sunk Costs in the Evaluation

question 14

Multiple Choice

When is it appropriate to include sunk costs in the evaluation of a project?

• A) Whenever they are relatively large
• B) If they improve the project's NPV
• C) If they are considered to be overhead costs
• D) Never

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Definitions:

Peripheral Route Persuasion

A method of persuasion that relies on superficial cues rather than the quality of the argument, leading to temporary attitude change.

Central Route Persuasion

A method of persuasion that involves deep, thoughtful consideration of the arguments presented, leading to lasting attitude change.

Logical Arguments

A sequence of statements or reasons made to demonstrate a proposition's truth, grounded in principles of sound reasoning and critical thinking.

Situational Attribution

Refers to the process of explaining someone's behavior based on external factors or circumstances rather than on internal characteristics.