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."
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== See also ==
== See also ==
* [[Contribution analysis]]
* [[Contribution analysis]]
* [[Fixed cost]]
* [[Incremental cash flows]]
* [[Opportunity cost]]
* [[Opportunity cost]]
* [[Project appraisal]]
* [[Project appraisal]]

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.


See also