Why Do Decision Makers Often Escalate Their Commitment to a Bad

question 66

Multiple Choice

Why do decision makers often escalate their commitment to a bad decision?

• A)They do not want to admit that their initial decision may have been flawed.
• B)They have reached cognitive overload.
• C)They have allowed themselves to be influenced by the organisation's culture.
• D)They were not able to find a reasonable alternative.

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Definitions:

Straight-line Method

A technique for computing depreciation or amortization that evenly divides the asset's cost over its expected lifespan.

Bond Liability

An obligation or debt represented by bonds issued by a company, which it is required to repay at a specified time with interest.

Effective Interest Method

An accounting technique used to allocate the interest expense or income of a bond over its life in a way that yields a constant rate of return.