Sunk costs: Difference between revisions
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Sunk costs are expenditure which has already taken place, or to which an organisation is already irrevocably committed. | Sunk costs are expenditure which has already taken place, or to which an organisation is already irrevocably committed. | ||
A sunk cost is one which cannot be recovered or reversed. | |||
Sunk costs are irrelevant to project appraisal: "Sunk costs don't count." | Sunk costs are irrelevant to project appraisal: "Sunk costs don't count." | ||
Latest revision as of 16:46, 10 August 2021
Project appraisal.
Sunk costs are expenditure which has already taken place, or to which an organisation is already irrevocably committed.
A sunk cost is one which cannot be recovered or reversed.
Sunk costs are irrelevant to project appraisal: "Sunk costs don't count."
A common mistake in project appraisal and analysis is the inclusion - in error - of sunk costs in the analysis.
