Escalation of Commitment Occurs When Managers

question 8

Multiple Choice

Escalation of commitment occurs when managers:

• A)lack optimism.
• B)stop supporting a poor decision.
• C)recognize that they cannot control the future.
• D)strive to reduce their cognitive dissonance.

---

Definitions:

Other Comprehensive Income

This includes revenues, expenses, gains, and losses that are excluded from net income on the income statement.

Equity Method

A method of accounting for investments in which the investor recognizes income based on the proportionate share of the investee’s profit or loss.

Investment Account

An account held at a financial institution or brokerage that is used to hold securities, stocks, bonds, mutual funds, and other investments.