- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 5. Capital Investments and Capital Allocation
- Subject 3. Capital Allocation Principles and Pitfalls
CFA Practice Question
Which of the following best describes a sunk cost?
B. A form of financing cost
C. The same thing as an opportunity cost
D. A cost that has already been incurred and cannot be removed
E. The cash flows of a new project that come at the expense of existing projects
A. An important consideration in the capital allocation process
B. A form of financing cost
C. The same thing as an opportunity cost
D. A cost that has already been incurred and cannot be removed
E. The cash flows of a new project that come at the expense of existing projects
Correct Answer: D
User Contributed Comments 3
| User | Comment |
|---|---|
| DonAnd | an unrecoverable cost |
| Dmoney | someone explain? jk JV concept |
| tichas | Cost that has already been incurred in the past and no longer relevant for future decision making. |