The concept of 'Sunk Cost' is important in decision making because:
A. It is the only relevant cost for pricing
B. It varies with the level of future output
C. It is a cost already incurred and should be ignored for future decisions
D. It should always be included in future cost calculations
Answer: Option C
Solution (By JKSSB Mock Tests)
Sunk costs are irreversible costs that have already been incurred. Rational decision-making requires focusing on incremental future costs and benefits, ignoring sunk costs.
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