One Major Consequence of the Planning Fallacy Is That

question 266

Multiple Choice

One major consequence of the planning fallacy is that

• A)people may spend more resources to insure themselves against rare events, but leave themselves uninsured against more common events.
• B)someone could persist in pursuing a failed policy despite overwhelming evidence of the failure.
• C)major business projects may create bottlenecks in the organization because they are not completed as scheduled.
• D)some people may wrongly believe in their forecasting ability to predict future outcomes of risky investments.

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Definitions:

Financial Distress

A situation where a company cannot meet or has difficulty paying off its financial obligations to its creditors.

Debt Financing

The method by which a firm raises capital through the sale of fixed income products, such as bonds or loans, committing to regular payments.

Empirical Evidence

Information obtained through observation or experimentation that can be verified or proven.

Technological Change

The process of innovation and improvement in technology, which often leads to increased efficiency and productivity within an industry or economy.