publication . Preprint . 1995

Regional Development and Management of Sunk Capital: Some Issues in Project Evaluation

Gyles, Oliver;
Open Access
  • Published: 01 Feb 1995
Abstract
Government intervention aimed at regional development can be justified where there are opportunities for profitable investement of public funds. Benefit: cost analysis can be an effective tool for economic evaluation of regional development project proposals, providcd the distinction between sunk costs and historical outlays is recognised. Because the cost of previous development is sunk, it is appropriate to value existing assets at their opportunity cost. In terms or ex ante project appraisal, historical outlays and current replacement costs are irrel...ant. The impact of "Rate of Return" capital management policy and renewals accounting on project viability i...
Subjects
free text keywords: cost analysis, sunk cost, rate of return, Agricultural Finance, Public Economics, [Regional development, benefit]
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