Your company is trying to perfect a new design of rapid coronavirus test. The company has been making significant losses over the last two years and has pinned much of their hope on this new test. The technology is experimental and temperamental and your company has already spend five times more than the original budget for the project. The research and development team are now requesting further funding which is the equivalent to the amount originally requested to fund the project in the first place. They point out that the money they are asking for is only 30% of what your main competitor, which is twenty times the size, spends on R&D. Your boss is keen to provide the extra funding as so much money has already been invested, but you recall from your DEMO course that a decision of this sort may be flawed.

1. What factors in this situation may mean that investing extra money in this project is a bad idea?

2. How might you go about ensuring a more rational decision?