Which of the Following Statements Is True of the Sunk

question 17

Multiple Choice

Which of the following statements is true of the sunk cost fallacy?

• A)It refers to the decisions made by managers to diversify their corporation because their competitor diversified first.
• B)It is based on the belief of firm managers about the potential of their company's ability to create value in the adjacent market.
• C)It refers to the excessive pride, arrogance, or overconfidence of managers that leads to poor decisions while making acquisitions.
• D)It is the belief of managers that investment in a failed acquisition must continue because significant amounts have already been invested.

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Definitions:

Exclusive Dealing

A contractual agreement where a seller agrees to sell, and a buyer agrees to buy, products exclusively from each other.

Johnson Controls

Johnson Controls is a multinational conglomerate that produces fire, HVAC, and security equipment for buildings. It specializes in products, solutions, and technologies for making buildings more efficient and sustainable.

Logistics Management

The part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information.

Raw Materials

The basic, unprocessed inputs used in manufacturing and production processes, such as metals, wood, or oil.