A Software Firm Has Invested $\$ 2$ Million into the Development of a New Computer Program

True/False

A software firm has invested $\$ 2$ million into the development of a new computer program. The firm is well aware that their ability to attract future investors heavily depends on the completion of this project. The firm has calculated that completing the project will result in a loss of $\$ 1$ million, but continue anyways. The only explanation for the firm's behavior is the sunk cost fallacy.