Sunk Cost and Opportunity Cost

Sunk costs

Sunk Cost Vs Opportunity Cost

Due to confusion in finance related issues, you can be stuck at one point for extended amount of time. It is certainly not a good thing. Difficulty is often faced in order to move forward. Therefore, few factors must be looked at before taking a decision on the occasion. According to the circumstances, assessments are done in most occasions. However, it is better to look at the difference between sunk cost and opportunity cost on the occasion.

What is sunk cost ?

Sunk Cost

As a result of past decisions, some costs can be observed. Sunk costsPossibility of retrieving this retrospective cost is very thin. In order to get a degree in Humanity, you may spend considerable amount of time in college. In addition, debt over credit card and student loan can be taken on the occasion as well. It is not possible to do anything to recover the money now.

What is opportunity cost?

Opportunity Cost

In case the resources are utilized ineffectively then problems can be observed. Opportunity costBest alternative must be chosen at every given occasion. More opportunities can be noticed in certain sector with a Ph. D degree in humanity than others. Due to inadequate choices, you may not find an option at all. Issues can be seen by investing money on the issue further. It is better to utilize the knowledge that you have gathered by spending sizable amount of money.

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