In Capital Budgeting, Sunk cost is excluded because it is:

of small amount
not incremental
not reversible
All of the above

The correct answer is: C. not reversible.

A sunk cost is a cost that has already been incurred and cannot be recovered. It is not relevant to future decisions, because it cannot be changed. For example, if a company has already spent $1 million on research and development for a new product, that cost is a sunk cost and should not be considered when deciding whether to launch the product.

Option A is incorrect because sunk costs can be of any amount. Option B is incorrect because sunk costs are always incremental. Option D is incorrect because sunk costs are not always reversible.

Sunk costs can be a source of decision-making bias, because people may be reluctant to abandon a project that has already cost them a lot of money. However, it is important to remember that sunk costs are irrelevant to future decisions, and that it is sometimes necessary to cut losses and move on.

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