Research has shown that in framing capital investment decisions,sunk costs tend to:

Question

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Research has shown that sunk costs tend to escalate commitment in making capital budgeting decisions. This is because decision-makers often have an emotional attachment to sunk costs, feeling that they have invested resources into a particular project and therefore feel more committed to its success. This can lead to a bias towards continuing with a project, even when it may no longer make financial sense.

Research Has Shown That in Framing Capital Investment Decisions,sunk Costs