At what point should a project be cancelled?
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At what point should a project be cancelled?
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According to Robichek and Van Horne (1967), "a project should be abandoned at that point in time when its abandonment value exceeds the net present value of the project's subsequent expected future cash flows discounted at the cost of capital rate." Translated into more common language, they stated that as a rule, a project should be cancelled when it no longer provides value to the stakeholders. They also imply that sometimes a project should not be cancelled ...
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