why are sunk costs important 
sunk costs are important because may act as distractors in decision making when a company analyzes costs and benefits sunk costs should have no bearing on the decision making process as the sunk cost will be incurred regardless of the outcome of the choice sunk costs are important to be mindful of because incorrectly including them in an analysis may lead to a less favorable decision being chosen the bottom lineall businesses and individuals incur sunk costs whether its the groceries already in your refrigerator the employees on a company s payroll or capital expenditure plans by your local government sunk costs are a natural part of finance these expenses are already committed to and nonrecoverable for that reason sunk costs should not be included in future decision making as the expense for the sunk cost will be exactly the same in every situation 