The Planning Fallacy Is the Tendency to __________

question 56

Multiple Choice

The planning fallacy is the tendency to __________.

• A) underestimate the time it will take to complete a project, even when past experience shows that you tend to underestimate your timing
• B) commit to too many responsibilities at a time, so that you are unsuccessful at all of them
• C) overestimate your ability to fulfill the requirements of an assignment
• D) overestimate your organizational skills

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of a business.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term and long-term obligations, calculated as current assets divided by current liabilities.

Acid-test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its most liquid assets without relying on the sale of inventory.

Debt-to-Equity Ratio

A ratio used to measure the balance between the amount of debt and equity financing a company's assets.