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

Oliver Gyles

No 170826, 1995 Conference (39th), February 14-16, 1995, Perth, Australia from Australian Agricultural and Resource Economics Society

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 is discussed in the perspective of regional development.

Keywords: Agricultural Finance; Public Economics (search for similar items in EconPapers)
Pages: 6
Date: 1995-02
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare95:170826

DOI: 10.22004/ag.econ.170826

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