Examlex

Solved

The Tendency to Continue Investing in a Project, Despite Mounting

question 87

Multiple Choice

The tendency to continue investing in a project, despite mounting evidence that it is not succeeding, often comes about because people mistakenly let sunk costs affect decision making rather than weighing the value of further investment is known as ________.


Definitions:

Simple Rate

A basic or straightforward interest rate calculation without compounding, often used in financial transactions and loan agreements.

Annual Depreciation

The portion of the cost of a fixed asset that is expensed on the income statement annually over its useful life.

Internal Rate

A variation of the Internal Rate of Return (IRR), focusing on the rate at which a series of cash flows would result in a net present value of zero.

Payback Period

The length of time it takes for an investment to generate cash flows sufficient to recover its initial cost.

Related Questions