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question Mesmermagic co June 2011

This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.

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August 8, 2017 at 10:36 am #400973
domwonguk
Member
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Hi,
Why in the npv of this project is the £7m development cost included in the calulation. Why is it not a sunk cost and therefore should not be included in the NPV of the project?
Thanks
August 8, 2017 at 4:37 pm #401046
John Moffat
Keymaster
- Topics: 57
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How can it be a sunk cost when the question says “they will spend $7 at the start of each of the next 2 years….”???
Sunk costs are when the money has already been spent.
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