Commitment to Prior Investments Escalates and Makes It Harder to Abandon

question 33

Multiple Choice

Commitment to prior investments escalates and makes it harder to abandon prior investments even if it may not make rational sense is called __________ .

• A) cost abandonment fallacy
• B) sunk cost fallacy
• C) commitment cost fallacy
• D) committed cost fallacy

---

Definitions:

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a single point in time by detailing assets, liabilities, and equity.

Operating Activities

The day-to-day actions of a business involved in producing and selling its goods or services, which are reflected in the cash flow from operating activities.

Producing

The act of creating, manufacturing, or generating products or services.

Delivering Goods

The process of transporting goods from the seller or a fulfillment center to the buyer's location.