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Even in a strong form efficient capital market, external monitors may not have an adequate incentive to discipline managers who have succumbed to moral hazard and caused the corporation to bear an inefficient sunk cost
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Why is the sunk cost is unavoidable cost?
Sunk cost is that cost which is incurred in past and it is unavoidable because any past decision or action cannot be reversed.
Which cost amounts can be found in a firm's accounting records?
sunk cost
Is fixed cost the same as sunk cost?
Sunk cost is that cost which is incurred in past so in decision making process any cost which is incurred in past has no effect on future events and due to which all fixed cost which are also incurred in past has no effect in future that's why it is not relevent for decision making process, so for decsion making point of view yes fixed cost is sunk cost.
What is the definition of sunk cost?
A cost that has already been incurred and thus cannot be recovered. because it has already happened. Sunk costs are independent of any event that may occur in the future.
Is it true or false that a cost that will not be affected by later decisions is termed an opportunity cost?
A cost that will not be affected by later decisions is termed a sunk cost.
How expensive are monitors from Hanns G?
Monitors from Hanns G cost approximately 90 dollars. They also offer ones that cost slightly less and ones that cost slightly more, but one can expect to pay around 90 dollars.
Explain the relation between sunk costs and specificity?
Specificity refers to the percentage of an investment that will be lost if the asset is switched to another use. Sunk cost is a cost that cannot be avoided once incurred. The relation between them is
Costs that were incurred in the past which are never incremental costs are called?
sunk cost
How would you define a book cost?
Book cost ; sunk cost. A cost incurrence where the cash expenditure has already occurred, such as the cost of depreciation for a machine purchased several years ago.
How many navy ships have been sunk?
Well over a dozen US Navy riverine boats were sunk in the Vietnam War; Swift Boats (PCF); PBRs (Patrol Boat River), Alpha Boats (ASPB-Assault Support Patrol Boats); unknown number of Monitors sunk, if any. The ex-USN Aircraft Carrier USS Card was sunk by communist sappers in harbor in South Vietnam.
What is the difference between sunk cost and fixed costs?
A fixed cost is a cost that will not change in total regardless of output. For example, no matter how much output you produce, rent expense is generally going to remain unchanged. A sunk cost is a cost that has already been incurred, and thus shouldn't factor into management decisions. For example, if you were making a decision about whether to manufacture a material rather than buy it from an outside provider, you would only care about which costs would change as a result of the decision. Any costs that would be the same regardless of whether you make or buy would be considered sunk costs.
What is the difference between opportunity cost and sunk cost?
sunk costs : These are costs that were incurred in the past. Sunk costs are irrelevant for decisions, because they cannot be changed.Opportunitycost: The profit foregone by selecting one alternative over another. It is the net return that could be realized if a resource were put to its next best use. It is "what we give up" from "the road not taken."
