Joaquin is offered vocational training that will cost $3,000 but will make him eligible for a promotion. Which statement is true?

• A. Skip the class; promotion won't affect salary.
• B. Take the class; it won't affect long-term earnings.
• C. Skip the class; the $3,000 cost is a sunk cost.
• D. Joaquin should take the class because a promotion will mean a larger salary over the long term.

Answer: (D)

Investing in skills can pay off through higher earnings later. The $3,000 upfront cost is an expense, but it buys training that makes Joaquin eligible for a promotion. If that promotion leads to a larger salary over time, the cumulative increase in earnings should exceed the initial cost, making the investment worthwhile in the long run.

The other ideas don’t fit because they ignore the link between the training and a higher salary: skipping the class contradicts the premise that the training leads to a promotion; claiming the promotion won’t affect earnings ignores the typical payoff of career advancement; and treating the cost as a sunk expense in this decision overlooks the potential future benefits that could repay and exceed the cost.