Sunk Costs

 Sunk costs: Sunk costs refer to costs already incurred that can no longer be reversed and should not be taken into account in an upcoming decision, on whether to continue a project.

 Opportunity costs: In simple terms, opportunity costs are the lost benefits of an alternative action that is not chosen or cannot be realized. So, you give up a possibility (opportunity). Therefore, opportunity costs are sometimes also called foregone costs or alternative costs. However, despite their name, they are not real costs. They are not taken into account in cost and activity accounting, as they are only used to quantify foregone alternatives. Overall it can be important in your decision making process.

 Relevant costs: The relevant costs are costs that are relevant to the decision. Relevant costs are costs that arise in the course of a realized alternative course of action. Relevant costs cannot be defined in absolute terms, as they are determined by the context in which the decision is made.

 Avoidable costs: are costs that can be avoided by making a specific decision.