(Consider This) Which of the following is an example of a sunk cost,as it relates to a firm?

A) An expenditure on raw materials used in the production process.
B) An expenditure on a nonrefundable,nontransferable airline ticket.
C) An expenditure to buy a delivery van.
D) An expenditure for a new factory.

Sunk Cost

A past expenditure that cannot be recovered and should not be considered when making future investment decisions.

Nonrefundable

A term used to describe payments or fees that cannot be returned to the payer under most circumstances.

Nontransferable

A characteristic of certain rights or privileges that cannot be legally transferred from one individual or entity to another.