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A company has invested significant funds into building a new subway line in City A . A risk analysis conducted by a research institute recently
A company has invested significant funds into building a new subway line in City A A risk analysis conducted by a research institute recently estimated that the project may experience cost overruns by up to $ billion, which is more than originally estimated. The CEO of the company needs the Board to approve additional funding to finish the project. Indicate whether the CEOs statement is economically valid or invalid. Explain your answer if you think the statement is invalid.
aWe have already invested a significant amount of time and money, so we cannot abandon the project now.
bWe should continue with the project because the expected benefits to finish it exceed the remaining costs.
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