Valley Forge and Metal purchased a truck five years ago for local deliveries. Which one of the following costs related to this truck is the best example of a sunk cost? Assume the truck has a usable life of five years. a. New tires that will be purchased this winter

b. Costs of repairs needed so the truck can pass inspection next month

c. Money spent last month repairing a damaged front fender

d. Engine tune-up that is scheduled for this afternoon

e. Cost for a truck driver for the remainder of the truck's useful life

Question

Business

Colin Hunt

20 June, 08:17

Valley Forge and Metal purchased a truck five years ago for local deliveries. Which one of the following costs related to this truck is the best example of a sunk cost? Assume the truck has a usable life of five years. a. New tires that will be purchased this winter

b. Costs of repairs needed so the truck can pass inspection next month

c. Money spent last month repairing a damaged front fender

d. Engine tune-up that is scheduled for this afternoon

e. Cost for a truck driver for the remainder of the truck's useful life

+2

Answers (1)

Know the Answer?

Ezequiel Romero · Answer 1

c. Money spent last month repairing a damaged front fender

Explanation:

Sunk costs are costs that have already been expended and it cannot be recovered.

Sunk costs aren't considered when making future financial decisions.

All the other costs listed in the options above have not been expended yet, therefore, they aren't sunk cost.