Sunk Costs Do Not Affect the Net Present Value of a Project

question 38

True/False

Sunk costs do not affect the net present value of a project.

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Definitions:

Posting

The process of transferring journal entry amounts to the respective accounts in the general ledger.

Prepaid Rent

The amount paid for rent before it is due, recorded as an asset on the balance sheet and expensed over the period the payment covers.

Rent Revenue

The income earned from leasing out properties or assets to tenants under rental agreements.

Unearned Rent

Payment received for rent before the rental period has occurred, classified as a liability until earned.