Imagine as a divisional manager and currently a member of a committee which is considering two product investments proposed by two other divisional managers: Jill and Bill. While walking over to the presentations, Jill seems rather arrogant. He mentions that he golfs with the CEO, is a key player in the firm, and that the divisional manager could really learn a lot from him. In thinking over the projects after the presentations, the manager finds he is really leaning toward Bill’s proposal even though the projects are quite similar in terms of estimated cash lows and risks. How can this be explained in behavioral finance? Please provide references and in text citations.
Imagine as a divisional manager and currently a member of a committee which is considering two product investments proposed by two other divisional managers: Jill and Bill. While walking over to the presentations, Jill seems rather arrogant. He mentions that he golfs with the CEO, is a key player in the firm, and that the divisional manager could really learn a lot from him. In thinking over the projects after the presentations, the manager finds he is really leaning toward Bill’s proposal even though the projects are quite similar in terms of estimated cash lows and risks. How can this be explained in behavioral finance? Please provide references and in text citations.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
Section: Chapter Questions
Problem 20P: Carson Wellington, president of Mallory Plastics, was considering a report sent to him by Emily...
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Imagine as a divisional manager and currently a member of a committee which is considering two product investments proposed by two other divisional managers: Jill and Bill. While walking over to the presentations, Jill seems rather arrogant.
He mentions that he golfs with the CEO, is a key player in the firm, and that the divisional manager could really learn a lot from him. In thinking over the projects after the presentations, the manager finds he is really leaning toward Bill’s proposal even though the projects are quite similar in terms of estimated cash lows and risks. How can this be explained in behavioral finance? Please provide references and in text citations.
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