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Sunk Cost

Sunk cost is a cost that has already occurred and cannot be recovered. In other words, a sunk cost is a sum paid in the past that is no longer relevant to decisions about the future.
#business
Zettelkasten, July 06, 2021 (changes)

Notes

  • Sunk cost is a cost that has already occurred and cannot be recovered. In other words, a sunk cost is a sum paid in the past that is no longer relevant to decisions about the future.

  • You, or a business, should not consider sunk costs when making decisions.

    • A business only considers the costs and revenues that will change as a result of its decisions.
  • It's also known as past cost, embedded cost, stranded cost, sunk capital, or retrospective cost.

References

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