Sunk cost
Sunk cost is a cost that has already occurred and is not affected by the capital project decision. Sunk costs are not relevant to capital budgeting decisions.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Sunk cost. A cost that has already occurred and is not affected by the capital project decision. Sunk costs are not relevant to capital budgeting decisions.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
