Sunk Cost

Categories: Accounting, Tax

Money you've already spent or invested.

It's gone, no matter what happens.

Example

You decide to surprise your boyfriend with tickets to the movies, which puts you back $28. By the time the evening rolls around, though, your end-of-week laziness has kicked in, and you don't want to go out anymore—you'd rather veg out on the couch.

Whether you decide to take advantage of the movie tickets or stay in, the $28 is a done deal; it's a sunk cost.

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