larryepage wrote:
Of course, the first principle everyone learns in engineering economics is that you must ignore sunk cost completely when making financial decisions. Money already spent, including money spent as the result of flawed or bad decisions, is water under the bridge. Nothing can be done about it, and if you don't ignore sunk costs going forward, the result will be more suboptimal decisions as the result of having improper boundary conditions around your analyses.
EXACTLY.
As you certainly know, unfortunately for many, they use the term “investment” to refer to sunk costs. That sets up a psychological barrier to adoption of a paradigm change, and that is dangerous in competitive environments.