Sunk Costs: Definition & Examples

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which of the following BEST describes a sunk cost?

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1. When should sunk costs be considered in decision-making?

2. If someone is considering sunk costs when making a decision, what are they doing?

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About This Quiz & Worksheet

This interactive and printable quiz/worksheet combo can be used to refine your understanding of sunk costs in regard to the conduct of business. These practice questions focus on study points regarding the nature of sunk costs.

Quiz & Worksheet Goals

These assessments can be used to measure your grasp of the following:

  • The definition of sunk costs
  • Sunk costs in relation to stolen money
  • When sunk costs should be considered in the decision making process
  • The part played by sunk costs in the cancellation of a project
  • What business decisions should be based on

Skills Practiced

This quiz and worksheet allow you to practice the following skills:

  • Making connections - use understanding of the concept of sunk costs
  • Interpreting information verify that you can read information regarding sunk costs and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about the nature of sunk costs

Additional Learning

To learn more about sunk costs, review the short accompanying lesson titled Sunk Costs: Definition & Examples. The lesson deals with the following objectives:

  • Explain why sunk costs cannot be recovered or refunded
  • Discuss the reasoning behind a decision to disregard sunk costs
  • Comment on the soundness of making a certain decision to justify past choices
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