medium10 pts · first answer countscapital-budgeting

Treating sunk costs

A company spent 20 lakh on a market study last year. It is now deciding whether to launch the product. How should the 20 lakh be treated in the launch NPV?

A.Add it to the initial investmentB.Spread it over the project life as a costC.Ignore it, because it is already spent and does not change with the decisionD.Deduct it from the terminal value

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Treating sunk costs

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