Which of the Following Is a Sunk Cost

question 21

Multiple Choice

Which of the following is a sunk cost?

• A) Operating costs for a new vehicle
• B) Trade in value of old vehicle
• C) Purchase price of new vehicle
• D) Purchase price of vehicle to be traded in

---

Definitions:

Adjust Prepaid Insurance Expense

The process of allocating prepaid insurance cost over the period to which it applies, reflecting its usage over time.

Financial Statements

Documents that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue, representing profitability.

Stockholders' Equity

This represents the ownership interest of shareholders in a corporation, calculated as total assets minus total liabilities.