How many of the following is an example of a violation of
the sunk cost principle? T. Let's do some...

Question

How many of the following is an example of a violation of
the sunk cost principle? T. Let's do some research on the past performance of
this company before we invest in it. II. I need to think about how much I paid
for the house five years ago because I do not want to lose on the sale. III. I
need to think about how much I paid for the house when I sell it if it will
reduce my tax bracket and I will have a higher profit. IV. My car transmission
just broke down and I decided to scrap the car because the cost for repairing
the car exceeds the amount I paid for the car. 

a. Only one is a violation of the sunk cost principle 

b. Only two are violations of the sunk cost principle 

c. Only three are violations of the sunk cost principle 

d. All of the above are violations of the sunk cost
principle

Rochak · Accepted Answer

Answer: c. Only three are violations of the sunk cost principle
(Explanation: The one correct explanation for sunk cost principle is option IV. Which is ‘My car transmission just broke down and I decided to scrap the car because the cost for repairing the car exceeds the amount I paid for the car)

How many of the following is an example of a violation of the sunk cost principle? T. Let's do some research on the past performance of this company before we invest in it. II. I need to think about...

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