(240)-343-2585

In which of the following situations are costs sunk?a.  A drug company spends $20 million to test the effectiveness of a new replacement drug for insulin, only to find out it is ineffective. b. AB-Inbev spends $15 million to develop and advertise a new mango-wheat beer that few people enjoy.c. A Kansas farmer wants to open a winery; she spends $600,000 to buy farmland only to discover that the weather is too extreme to grow finicky grapes. She can resell the land to a wheat farmer for $450,000.d. Lockton, a risk-management company, pays a $10,000 signing bonus to a new employee who turns out to be unreliable.e. You purchase a $150 ticket to a nighttime concert, only to have an instructor surprise you with a demanding assignment due the same evening.