Examples of application fees where you pay a fee without any guarantee of acceptance off the top of my head are college applications and applications for renting an apartment. I'm sure there are others.

This is obviously a cultural thing. In England we do not pay to apply for things, especially universities whereby they are charging you to go there.

Sure, as an individual you can often cash out an "investment" but this is not the case for a business. If you invest in developing and/or producing a product and no one buys it you can't just "cash out".

Very true, however I don't see the analogous link here.

I'd prefer to see a deposit that was returned if you weren't successful, if you are then it is burned to Null.

Thanks again for your time in answering my questions. Much appreciated!

Cg