When Would Sunk Costs Be Irrelevant for Current Decision Making

question 13

Multiple Choice

When would sunk costs be irrelevant for current decision making?

• A) when the sunk costs are computed using accounting methods
• B) when the sunk costs are greater than variable costs
• C) when the sunk costs have been incurred only a short time ago
• D) Sunk cost are always irrelevant when making current decisions.

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Definitions:

Frame Bending

An approach in organizational change that involves modifying organizational structures and processes to achieve desired outcomes.

Frame Breaking

Involves significantly changing or challenging traditional beliefs, practices, or structures.

Reorientation

The process of changing one's focus, direction, or commitments towards new goals or principles.

Nadler-Tushman Model

A framework used for diagnosing organizational behavior and performance, focusing on the alignment between strategy, structure, and processes.