Question

You are to receive five gold coins from your great uncle as an incentive to study hard. the coins were originally purchased in 1982. your great uncle will deliver the coins the week after finals (assuming your grades are "acceptable"). the amount your great uncle paid for the coins is a(n): a. indirect cost. b. overhead cost. c. opportunity cost. d. sunk cost.

Answer 1

Answer: (D) Sunk cost    

Explanation:

A sunk cost is one of the type of cost which is used in making various types of decisions for the purpose of continuously investing on the current project and it is also refers as the retrospective costs.

According to the given question, the uncle gift five gold coin in the form of incentive for studying hard for the exams and assuming that the student receive good score in the exam so the amount paid by the great uncle is known as the sunk cost that is used for investing expenditure for the future.    

 Therefore, Option (D) is correct answer.