definitions Sunk cost

Sunk cost

A cost that has already been incurred and cannot be reversed, which therefore cannot be avoided by current or future action. Sunk costs should therefore be irrelevant to current decisions. A cost that has already occurred and cannot be removed. Because sunk costs are in the past, such costs should be ignored when deciding whether to accept or reject a project. Expenditures that is at least partially lost once an investment is made. Unrecoverable past outlays that, because they cannot be recovered, should not affect present actions or future decisions.