What is a sunk cost, and if included in a project how should they be treated?

Q: What costs should be capitalized for a self constructed asset?

A:

Q: Explain the Service Projects versus Revenue Projects?

A: The project is the collaborative effort initiated to achieve a certain objective within a certain…

Q: Explain why depreciation and interest should not be included as costs in a discounted cash flow…

A: The company makes several investments and an evaluation of investment is necessary. Therefore, the…

Q: Does the Analysis Period Equal Project Lives?

A: Yes, the analysis period equals the project lives.

Q: What is physical life of project?

A: Physical life of a project is the duration of time in which the project has been fully used and…

Q: Differentiate between a project’s physical life and its economic life.

A: At the point when an organization purchases an asset it mulls over numerous things like the expense…

Q: Describe the Project selection rules under the IRR criterion?

A: IRR (Internal rate of return) is one of capital budgeting techniques which is used to evaluate the…

Q: What are the benefits and costs of renovation?

A: Introduction: Renovation is the improvement process in which upgrades and repair of the property are…

Q: What is meant by relevant costs and there use in making short-term decisions?

A: Cost refers to the amount of expenditure incurred by an individual or an entity in relation to goods…

Q: The MARR used for a project’s acceptance or rejection is set relative to what cost?

A: MARR is a discount return which is the lowest rate of return that must be accepted in the project.

Q: What is the process of allocating the cost of natural resources to expense as they are used?

A: Natural resources usually include oil reserves, coal deposits, and mineral deposits. The natural…

Q: what is pay back analysis in project management

A: Payback period is the time a project will take to payback the money spent on it.

Q: Is there a difference between relevant costs and incremental costs? Explain

A: Relevant cost: Relevant cost is the cost which is relevant in decision making of a project, and…

Q: What are the technique of project appraisal

A: Step 1: Techniques of the project appraisal are: Profitability index Payback period NPV IRR

Q: Which of the following costs is relevant in decisionmaking? committed costs accounting costs cash…

A: Following is the answer to the given question

Q: Describe the methods of determining the Project Risk?

A: Project risk is an uncertain event or circumstance that affects at any rate one objective of a task,…

Q: what is net present value in project management?

A: Net present value (NPV) is an important technique that is been used by the project manager in order…

Q: What is interpretation of the usefulness of the contribution margin concept?

A: Contribution margin The additional profit gained for each unit sold is calculated by subtracting the…

Q: Explain Estimating Development Cost and Interest Carry?

A: INTRODUCTION Estimating development cost in project management is the process of forecasting the…

Q: Why sunk cost should not be considered when evaluating a project?

A: Sunk cost is a cost that has incurred , and which cannot be recovered.