InvestorsHub Logo

Rawnoc

10/05/12 7:24 PM

#199103 RE: the big guy #199100

Sunk costs should always be ignored when an investor makes an investment decision based on a company projected cash flow going forward.

Investors in JBII today get all the benefits of 3 years worth of trial and error expenses, capital investments, R&D, etc without any of those expenses reoccuring. It makes no difference if it cost JBII $500 million, $50 million, $5 million, or 5 cents to get to this point.

Explained nicely here:

http://stevenclark.com.au/2011/01/02/sunk-costs-are-irrelevant-to-financial-decisions