The idea that after making a large investment,a manager should not abandon the project is known as the:
A)negative NPV fallacy.
B)abandonment fallacy.
C)sunk cost fallacy.
D)dependence fallacy.

Question

Quizplus · Accepted Answer

The idea that after making a large investment, a manager should not abandon the project is known as the sunk cost fallacy. This is because the manager is assuming that the investment made is a sunk cost and cannot be recovered, and hence, is reluctant to abandon the project. However, this decision should be based on the future potential of the project and not on the investments made in the past.

The Idea That After Making a Large Investment,a Manager Should