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Why should relevant costs be reflected in the objective function but not sunk costs?
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Why should relevant costs be reflected in the objective function but not sunk costs?

User Jordumus
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Answer:

Sunk costs (past costs) or committed costs are not relevant. Sunk, or past, costs are monies already spent or money that is already contracted to be spent. A decision on whether or not a new endeavour is started will have no effect on this cash flow, so sunk costs cannot be relevant.

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User Snehasis
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