Sunk Costs Refer to

question 34

Multiple Choice

Sunk costs refer to

• A)costs that were incurred in the past and cannot be recovered and thus should not affect current decisions.
• B)all the costs that a firm must incur in the process of production.
• C)the costs that change proportionately with a change in the output.
• D)the quantities of a good that are given up to obtain one unit of another good.

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Definitions:

Rate of Return

The upward or downward movement in the value of an investment through a given timeframe, expressed as a percentage of the investment's initial cost.

Invests

Assigning financial resources with the goal of achieving returns or profit.

Granddaughter

A female grandchild, being the daughter of one's son or daughter.

Compound Interest

Interest calculated on both the original amount of money either loaned or deposited, as well as on the interest that has already been added to it from earlier periods.