Agile Business Analysis Practice Exam 2026 - Free Agile Business Analysis Practice Questions and Study Guide

The concept of sunk cost refers to the money and effort that have already been invested in a project or initiative and cannot be recovered. When making decisions about whether to replace or retire a solution, it is important to consider sunk costs because they can often unduly influence decision-making. This bias, known as the sunk cost fallacy, may lead individuals or teams to continue investing in a failing project simply because they have already invested so much in it, rather than evaluating the prospective value of future decisions based solely on potential returns.

In an Agile business analysis context, recognizing sunk costs helps teams to objectively assess the viability of a solution based on its current performance and future potential, rather than being overshadowed by past expenditures. This approach encourages a focus on delivering value and making informed decisions that align with the overall goals of the organization rather than being trapped by previous commitments.