David's Insistence That He Go See a Movie for Which

question 5

Multiple Choice

David's insistence that he go see a movie for which he had already purchased nonrefundable tickets, even though he was exhausted and had no desire to see the movie, best illustrates

• A) risk avoidance.
• B) the sunken cost fallacy.
• C) loss aversion.
• D) the influence of fatigue on decision-making abilities.

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Definitions:

Bottom-Up Planning

A planning approach where strategies and goals are defined at lower levels of the organization before being aggregated to define overall corporate strategies.

Top-Down Planning

Business planning based on a set of goals forced on the organization by senior management. Top-down planning has a tendency to lead to excessively optimistic plans.

Conservative

An investment strategy or approach that prioritizes preservation of capital and moderate growth, typically with lower risk.

Financial Plan

A comprehensive evaluation of an individual's or organization's current and future financial state by using current known variables.