sunk costs

sunk costs definition - finance
Costs that have been incurred in a project or investment that canÂ’t be recovered if the project is stopped or altered. For example, sunk costs occur in drilling for new oil reserves. If no oil reserves are found, the amount of money that has been spent to put people and equipment in place canÂ’t be recovered, so the costs are sunk.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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