Question
Good Investments Inc. is considering buying Small Co. with the hopes of growing it rapidly and selling it in a few years. Good Investments Inc.
Good Investments Inc. is considering buying Small Co. with the hopes of growing it rapidly and selling it in a few years. Good Investments Inc. has already payed an accounting firm $500,000 to verify the financials of Small Co. If Good Investments Inc. does not buy Small Co. they will invest their money in stocks. If Good Investment Inc. decides to buy Small Co. they will need to pay Investment Bankers and Lawyers $1,000,000 to broker the deal. Small Co. currently has $45,000,000 in liabilities, $25,000,000 in owner's equity and $70,000,000 in assets. Which of the mentioned costs is/are sunk cost(s)?
Group of answer choices
a. Payment to the accounting firm
c. Payment to bankers and lawyers
b. Investment in stocks
d. Small Co.'s $45,000,000 in liabilities
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