Suppose that you borrow $30,000 at the beginning of the year at, say, 10 percent interest. You sign a lease to rent an office and pay $15,000 in advance rent for next year. You spend $5,000 on office furniture and $3,000 to paint the office. At the end of the year you pay back the $30,000 loan plus the $3,000 interest payment and sell the used office furniture for $ 4,000.
So, what are your sunk costs? Please explain.