Is this a sunk cost?

[Justin]

I am confused by what my accounting prof said today, so i turn to RFD.

She said, "Suppose i bought boards to build a deck but then decided to use aluminum instead and the boards cannot be returned. The boards are a sunk cost"

Is the entire cost of the boards really considered sunk? Surely the boards could be sold for somthing therefore some money recovered.

[boyoflondon]

Sunk costs are costs which CANNOT be recovered.
ie. you buy a movie ticket but don't actually go to see the movie.

In your case, you can still re-sell the wood so only the portion NOT recovered would be a sunk cost

[danfromwaterloo]

I am confused by what my accounting prof said today, so i turn to RFD.

She said, "Suppose i bought boards to build a deck but then decided to use aluminum instead and the boards cannot be returned. The boards are a sunk cost"

Is the entire cost of the boards really considered sunk? Surely the boards could be sold for somthing therefore some money recovered.

You're thinking too out of the box. Assume that the money you've invested will never be recouped from those boards. THAT's a sunk cost.

If you buy those boards at $10 a piece, let's say 5 of them, and can sell each for $5 a piece, then your sunk cost is $25 (because that's the money you cannot recover). The other $25 you can recover via liquidation - selling the assets for money.

[ji2o0k]

best example of a sunk cost are women you are trying to date or dating.....

Anything spent.......such as dinner, drinks, movies, gifts like jewellery etc are costs which you will never recover.......:lol:

[branat]

best example of a sunk cost are women you are trying to date or dating.....

Anything spent.......such as dinner, drinks, movies, gifts like jewellery etc are costs which you will never recover.......:lol:

Actually, you could capitalized it and amortize it over the life of marriage.

[ji2o0k]

Actually, you could capitalized it and amortize it over the life of marriage.
good point, that is if the girl you are dating is the one you want to marry........

what about the ones you don't want to marry or the ones where the relationship doesn't work out?

hhhaa man.........RFD girls are going to flame me.........:cheesygri

[weedb0y]

good point, that is if the girl you are dating is the one you want to marry........

what about the ones you don't want to marry or the ones where the relationship doesn't work out?

hhhaa man.........RFD girls are going to flame me.........:cheesygri

or the ones that end with divorce (aka, that brothel story in off-topic!)

[CSAgent]

best example of a sunk cost are women you are trying to date or dating.....

Anything spent.......such as dinner, drinks, movies, gifts like jewellery etc are costs which you will never recover.......:lol:

Hahahahahahaha...

That's why you shouldn't put out too much for her until the deal is "sealed"..then you can invest a little more capital into the proposition.

[Engi-Nir]

best example of a sunk cost are women you are trying to date or dating.....

Anything spent.......such as dinner, drinks, movies, gifts like jewellery etc are costs which you will never recover.......:lol:

hold on ...this is not a sunk cost, it's an investment and like any investment, there may or may not be a return, ..a return in this case, would be "a little bit of play ;) "

sunk cost is money spent(wood) into a project, and you don't gain anything out it....and clearly the dinners/drinks/etc is not a sunk cost cause men expect something in return ;) otherwise, you can say, you will be spending money on the girl while someone else dates her...then it is a sunk cost :confused: