5. Cobra Mining Company spent $200 million five years ago to develop underground mining and milling operations in a remote area of a western state. Metals prices have since declined precipitously and the company is considering abandoning the operation. The term that would best describe the $200 million expenditure as regards the abandonment decision is a. sunk cost. b. noncontrollable cost. c. differential cost. d. opportunity cost.

June 20, 2017 mfadmin Managerial Accounting

Average Rating

0 out of 5 stars. 0 votes.

5. Cobra Mining Company spent $200 million five years ago to develop underground mining and milling operations in a remote area of a western state. Metals prices have since declined precipitously and the company is considering abandoning the operation. The term that would best describe the $200 million expenditure as regards the abandonment decision is a. sunk cost. b. noncontrollable cost. c. differential cost. d. opportunity cost.