New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    Irrelevant and historical cost is _______

    A Sunk cost Correct Answer Incorrect Answer
    B Variable cost Correct Answer Incorrect Answer
    C Notional cost Correct Answer Incorrect Answer
    D Shut down cost Correct Answer Incorrect Answer
    E Capitalized cost Correct Answer Incorrect Answer

    Solution

    Sunk Cost is a cost that has already been incurred and that cannot be recovered . In decision making, sunk costs are treated as bygone and are not taken into consideration when deciding whether to continue an investment project, as such they are irrelevant for decision making.

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