Match the Following: -Escalation of Commitment

question 19

Multiple Choice

Match the following:
-Escalation of Commitment

• A)A simple decision rule.
• B)An inclination to choose options displaying minimal risk.
• C)A decisional situation where options have probabilities of success.
• D)Delegating and giving employees authority to make decisions.
• E)A situation where a person continues to follow/implement an option even though its chances of success are minimal and possibly declining.

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Definitions:

Cash Flows

The cumulative amount of capital moving into and leaving a company, impacting its liquidity.

Internal Rate of Return (IRR)

The discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero, used to assess the profitability of potential investments.

Mutually Exclusive Projects

Investment opportunities where the acceptance of one project prevents the acceptance of another, requiring a choice to be made based on potential returns.

Initial Cost

Initial cost is the total expense incurred to acquire an asset or start a project, including purchase price and all related fees.