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Current Ratio

In capital bu...

Question

In capital budgeting, sunk cost is excluded because it is ___________.

A

of small amount

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B

not incremental

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C

not reversible

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D

All of the above

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Solution

The correct option is B not incremental
A sunk cost is that cost which has already been incurred and can not be recovered. Hence this will not be included in capital budgeting.

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