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Shouldn't the dismantling cost be ignored given that it would be incurred anyways, with or without the project?
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Yes! :)
I hve answered this earlier: https://www.preplounge.com/de/consulting-forum/dismantling-costs-sunk-costs-7303
Cheers, Sidi
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Hey Vasco,
Good thinking and absolutely the right way to approach a case. However, remember to be very careful of wording. During a case, make sure to clarify exactly what calculations are expected...this way you'll avoid this misunderstanding if it arrives in a case :)
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Hello!
This is one of the basic concepts in Econ: sunk costs should not be taken into consideration when assessing new business or workstreams.
However, careful here, since here they define clearly the KPI tht they want to look into for go-no go, profit margin, and dismantling costs are already embebbed in the profit margin in the problem.
Hope it helps!
Cheers,
Clara
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