Which of the Following Is an Example of a Sunk

question 132

Multiple Choice

Which of the following is an example of a sunk cost in a capital budgeting decision regarding the purchase of new equipment for a profitable business that pays taxes?

• A)The disposal of the equipment to be replaced.
• B)The purchase price of the equipment to be replaced.
• C)The additional working capital requirement.
• D)The operating cost of the new equipment.

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Definitions:

Statistics

The science of collecting, analyzing, interpreting, and presenting empirical data to make informed decisions.

Probability

A numerical measure representing the likelihood or chance of a particular event occurring, ranging from 0 to 1.

Population

Refers to the total set of observations that can be made in any given survey or experimental study.

Sample

A group within a larger population chosen for the purpose of conducting measurements, observations, or inquiries to gather data about the entire population.