A Cost Should Be Considered Sunk When It

question 95

Multiple Choice

A cost should be considered sunk when it:

• A) is fully depreciated.
• B) produces no additional sales revenues.
• C) has no effect on future flows.
• D) is replaced by costs that are not yet sunk.

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Definitions:

Discount Rate

The interest rate that central banks charge commercial banks for loans, influencing monetary policy and economic conditions.

Monthly Payments

Regular payments made over a period, often used in loans and mortgages, covering interest and principal repayment.

College Support

Financial assistance provided to students for education expenses, which may include scholarships, grants, and loans.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return, reflecting the time value of money.