sunk cost and incremental cost
What are The meaning of sunk cost and incremental cost in below sentences?
. We investigated it by using functional magnetic resonance imaging (fMRI) to monitor healthy subjects' brain activities when they made decisions in a task wherein sunk cost and incremental cost were systematically manipulated.
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Answers · 5
2
Sunk cost is wasted cost you have made on wrong purchases or services and it is not possible to recover them. For example: If you invest your money in doing engineering and after completing it you started doing something else which has nothing to do with the engineering sector than in such case all the money you have invested in your engineering course will be considered as sunk cost.
Or if you purchase any machine(say vacuum cleaner) and you are not using it and left it in idle state then again the money you paid to buy it will be considered as sunk cost.
Incremental cost meaning is increase or decrease in total cost to make one additional unit of an item. It is a variable cost, its value keep changing because it consists material cost, labour cost which are not fixed.
1
1. incremental cost - the increase or decrease in costs as a result of one more or one less unit of output.
2. sunk cost: Money already spent and permanently lost.
0
No idea.
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