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Issue 5(1), October 2010 -- Paper Abstracts

Girard  (p. 9-22)

Cooper (p. 23-32)

Kunz-Osborne (p. 33-41)

Coulmas-Law (p.42-46)

Stasio (p. 47-56)

Albert-Valette-Florence (p.57-63)

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JOURNAL OF APPLIED BUSINESS AND ECONOMICS

On the Relevancy of Future Sunk Costs

Author(s): Mark J. Shrader, Kent A. Hickman

Citation: Mark J. Shrader, Kent A. Hickman, (2011) "On the Relevancy of Future Sunk Costs," Journal of Applied Business and Economics, Vol. 12, Iss. 1, pp. 34 - 37

Article Type: Research paper

Publisher: North American Business Press

Abstract:

Any sunk costs associated with specific investment proposals by firms should not be included in

NPV estimates of those projects. However, in certain instances, expected sunk costs associated

with future investment proposals should be included in NPV estimates of current projects. If the

future expected sunk costs, where appropriate, are not considered, there will be a bias toward

rejecting the current investment proposals. This paper develops the appropriate decision rule for

the inclusion or exclusion of future sunk costs.