Practice Defining Sunk Cost - 1.7 | 19. Equipment Life and Replacement Analysis (Part 3) | Construction Engineering & Management - Vol 1
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Knowledge

1.7 - Defining Sunk Cost

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Define sunk cost.

💡 Hint: Think about money spent on a service or product that you can no longer use.

Question 2

Easy

Why should sunk costs not influence current decisions?

💡 Hint: Consider how what was spent influences future expenses.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is a sunk cost?

  • A cost that can be recovered later.
  • A cost that has already been incurred and cannot be recovered.
  • An expected future cost.

💡 Hint: Remember, it's about irrecoverable money.

Question 2

True or False: Sunk costs should influence your decision to replace old equipment.

  • True
  • False

💡 Hint: If you've already spent it, should it impact tomorrow's choices?

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company bought a software system for $150,000. After two years, its market value drops to $80,000. If they continue investing in updates costing $20,000 a year, at what point should they consider replacing it?

💡 Hint: Focus on performance and savings, not the original price.

Question 2

Your friend spent $40,000 on a used car. Now, it's worth $15,000, and they're considering a new car worth $25,000. What advice would you give about the sunk cost?

💡 Hint: Consider how much usage they get from the current versus the future possibilities.

Challenge and get performance evaluation