Listen to a Business English Dialogue About Sunk costs
Quinn: Hey Jimmy, have you heard about sunk costs? They’re costs that have already been incurred and can’t be recovered.
Jimmy: Oh, I think I’ve heard of that. So, it’s like when you’ve spent money on something, and even if it doesn’t work out, you can’t get that money back?
Quinn: Exactly! It’s important to remember that sunk costs shouldn’t influence future decisions because they’re already gone, and you can’t change them.
Jimmy: That makes sense. So, it’s better to focus on future costs and benefits rather than dwelling on what’s already been spent?
Quinn: Exactly! You should base your decisions on what will happen in the future, not what happened in the past.
Jimmy: Are there any common examples of sunk costs in business?
Quinn: Sure, one example could be spending money on a marketing campaign that doesn’t yield the expected results.
Jimmy: Ah, I see. So, even if the campaign didn’t work out, it’s important not to keep investing in it just because money has already been spent?
Quinn: That’s right. It’s better to cut your losses and redirect resources towards more promising opportunities.
Jimmy: Thanks for explaining, Quinn. Sunk costs can be a tricky concept, but it’s important to understand their impact on decision-making.
Quinn: You’re welcome, Jimmy. Understanding sunk costs can help businesses make more rational and effective decisions in the long run.
