Which of the following is an example of a sunk cost, as it relates to a firm?

A) an expenditure on raw materials used in the production process
B) an expenditure on a nonrefundable, nontransferable airline ticket
C) an expenditure to buy a delivery van
D) an expenditure for a new factory

Sunk Cost

A cost that has already been incurred and cannot be recovered.

Nonrefundable

Describing a payment or deposit that cannot be returned or refunded back to the payer under most circumstances.

Nontransferable

An attribute of an item or asset that cannot be legally transferred or assigned from one individual or entity to another.