Which of the following statements about sunk costs is correct? If sunk costs are considered and reflected in a projects cash flows, then the projects calculated payback will be larger than it otherwise would be. An example of a sunk cost are costs associated with a sinking fund for bonds. Sunk costs are only relevant for the payback method. A good example of a sunk cost is the cost of market study that was undertaken prior to deciding on whether to pursue a project.