Question

A cost that cannot be avoided or changed because it arises from a past decision, and is irrelevant to future decisions, is called a(n):

Answer 1

Answer: Sunk cost

Explanation:

A sunk cost is a cost that an individual, firm or the government has already incurred and therefore can't be recovered anymore.

For example, marketing campaign expenses, rent or the money that is spent on purchasing new equipment can all be referred to as sunk costs as they are past cost and can't be recovered again.