Which of the following is an example of a sunk cost? Select one: a. The firm pays to replant trees following the clear cutting of 1,000 acres during a timber harvest. b. The firm spends $20 million on heart medication research and discovers a promising drug. c. The firm replaces a piece of manufacturing equipment to maintain current manufacturing capacity. d. A bank opens a new office, and the new office leads to a decline in deposits at the bank's other offices. e. All of the above are examples of sunk costs.
Which of the following is an example of a sunk cost? Select one: a. The firm pays to replant trees following the clear cutting of 1,000 acres during a timber harvest. b. The firm spends $20 million on heart medication research and discovers a promising drug. c. The firm replaces a piece of manufacturing equipment to maintain current manufacturing capacity. d. A bank opens a new office, and the new office leads to a decline in deposits at the bank's other offices. e. All of the above are examples of sunk costs.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk
Section: Chapter Questions
Problem 1P: Talbot Industries is considering launching a new product. The new manufacturing equipment will cost...
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Which of the following is an example of a sunk cost?
Select one:
a. The firm pays to replant trees following the clear cutting of 1,000 acres during a timber harvest.
b. The firm spends $20 million on heart medication research and discovers a promising drug.
c. The firm replaces a piece of manufacturing equipment to maintain current manufacturing capacity.
d. A bank opens a new office, and the new office leads to a decline in deposits at the bank's other offices.
e. All of the above are examples of sunk costs.
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