Suppose a capital project is a result of a new product that took three years to develop and $500 million in research and development. This $500 million is best described as a:

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Sunk costs are expenses that have already been incurred and cannot be recovered. The $500 million spent on research and development for the new product is a sunk cost because it has already been spent and cannot be recovered, regardless of the future success of the project.

Suppose a Capital Project Is a Result of a New