Another type of cost that should not be included in an investment decision is a “sunk cost.” A
sunk cost is one that has already been incurred and will not go away if the investment is not made. For example, if $10,000 is spent on a feasibility study that recommends an additional $50,000 investment in efficiency, the $10,000 sunk cost is not part of the costs that are included in a financial analysis that will determine the investment decision. Thus, the investment decision is based on costs going forward, not looking back.