Homework: Chapter 11 Homework Score: 0 of 1 pt P11-5 (similar to) 6 of 14 (0 complete) HY Score: 0%, 0 of 20 pts Question Help Sunk and opportunity cash flows Dave and Ann Stone have been living at their present home for the past 6 years. During that time, they have replaced the water heater for $394, replaced the dishwasher for $609, and have had to make miscellaneous repair and maintenance decided to move out and rent the house for $973 per month. Newspaper advertising will cost $71. Dave and Ann intend to paint the the exterior. They estimate that those costs will run about $930. The house should be ready to rent after that. in reviewing the financial situation, Dave of approximately $1,460. They have interior of the home and being relevant, and so he plans to net out the estimated e a. Do Dave and Ann b. Which of the expenditures should be classified as sunk costs and which should be viewed as opportunity costs? the difference between sunk costs nd opportunity costs? Explain the two concepts to them. a. Do Dave and Ann understand the difference between sunk costs and opportunity costs? Explain the two concepts to them. (Select cash flows that could be ealized from the next best alternative use of an owned asset. Opportunity costs are costs that have already been O B. Suk costs are costs tat have already been incurred and thus the money has already been spent. Opportunity costs are any O C. Sunk costs are costs that have already been incurred and thus the money has already been spent O D. Sunk costs are any added costs necessary to get an asset into operation. incurred and thus the money has already been spent asset into operation. from the next best alternative use of an owned asset. use of an owned asset Opportunity costs are cash flows that could be realized Clear All