What Is a Sunk Cost? Should It Be Included in the Incremental

question 79

Essay

What is a sunk cost? Should it be included in the incremental cash flows for a project? Why or why not?

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Definitions:

Maintenance Factors

are aspects or activities required to keep a system, equipment, or process operating smoothly and effectively.

Persistence of Behavior

The continuation of behavior or effort despite difficulties or resistance, showing determination and resilience.

Intrinsic Motivation

The drive to perform an action for its own sake and personal reward, rather than for some external reward or pressure.

Maintenance Factors

Elements that contribute to the upkeep and preservation of a system, equipment, or facility to ensure its optimal performance.