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    Sunk Costs

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    Ella
    A sunk cost is a cost that has already been incurred and cannot be recovered, such as rent, marketing expenses, or equipment purchases. Businesses do not factor sunk costs into future financial analysis because the money is gone and will not change. However, understanding sunk costs allows companies to better prepare for and budget unavoidable costs to prevent additional unnecessary expenses.

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    Sunk Costs

    Uploaded by

    Ella
    25 views1 page
    A sunk cost is a cost that has already been incurred and cannot be recovered, such as rent, marketing expenses, or equipment purchases. Businesses do not factor sunk costs into future financial analysis because the money is gone and will not change. However, understanding sunk costs allows companies to better prepare for and budget unavoidable costs to prevent additional unnecessary expenses.

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    A sunk cost is a cost that has already been incurred and cannot be recovered, such as rent, marketing expenses, or equipment purchases. Businesses do not factor sunk costs into future financial analysis because the money is gone and will not change. However, understanding sunk costs allows companies to better prepare for and budget unavoidable costs to prevent additional unnecessary expenses.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    25 views1 page

    Sunk Costs

    Uploaded by

    Ella
    A sunk cost is a cost that has already been incurred and cannot be recovered, such as rent, marketing expenses, or equipment purchases. Businesses do not factor sunk costs into future financial analysis because the money is gone and will not change. However, understanding sunk costs allows companies to better prepare for and budget unavoidable costs to prevent additional unnecessary expenses.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    What is sunk cost?

    A sunk cost refers to a cost that has already occurred and has no potential for recovery
    in the future. For example, your rent, marketing campaign expenses or money spent on
    new equipment can be considered sunk costs. A sunk cost can also be referred to as a
    past cost. Businesses don't typically consider sunk costs in their financial analysis for
    the future because these costs have already happened, they can't be recovered and
    they won't change. Despite this, it's beneficial to understand how sunk costs work in
    order to prepare for them. The better you're able to prepare for a sunk cost and
    potentially budget for it, the better you'll be able to avoid any additional costs.

    Source: https://www.indeed.com/career-advice/career-development/sunk-cost-
    definition-and-examples

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