Which One of the Following Best Illustrates an Error Which

question 36

Multiple Choice

Which one of the following best illustrates an error which you, as a project manager, might make due to confirmation bias?

• A) Overestimating the best outcome expected from a project while underestimating the possibility of a less favorable outcome
• B) Assuming that a new project will be profitable since similar projects in the past were successful
• C) Assuming that your expectations of the future outcome from a project are more accurate than the expectations of others within your organization
• D) Listening to the advice of subordinates with whom you agree while ignoring the advice of subordinates with whom you tend to disagree
• E) Downplaying the cost of future failure of an existing project since the project has already paid for itself

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Definitions:

Effective Interest Method

A technique used in accounting to allocate the interest expense or income of a financial instrument over its lifespan in a way that results in a constant rate on the carrying amount.

Bonds Payable

Long-term liabilities representing a company's commitment to pay a specified amount of money at certain future dates for funds borrowed.

Interest Expense

The expense an entity faces for using borrowed capital, recorded as a non-operating cost on the income statement.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a specific period, reflecting its financial performance.