Answer:
Managers often struggle to internalize the sunk-cost concept when making decisions because they have a tendency to focus on past investments and the resources that have already been committed to a project. They may feel that abandoning the project at this point would be a waste of the resources already invested, which can lead to a reluctance to let go of the project even if it is no longer economically viable or likely to be successful. This is known as the sunk cost fallacy, where individuals make decisions based on what has already been invested rather than on the expected future outcomes of the decision. Additionally, managers may feel a personal attachment to a project and may fear that abandoning it could reflect poorly on their leadership or decision-making abilities. Overcoming the sunk-cost fallacy requires a shift in mindset towards focusing on future costs and benefits, rather than past investments, and being willing to make tough decisions based on the best available information.
Step-by-step explanation: