Table 14-3 The Following Data Consists of a Matrix of Transition Probabilities

question 57

Multiple Choice

Table 14-3
The following data consists of a matrix of transition probabilities (P) of three office locations (A,B,C) within a large company and how employees shift from one location to the other from year to year.The company CEO would like to understand the movement of employees over time and the long-run proportion of employees in each location.Assume that there is always a total of 3000 employees.
A B C
P = π(0) = [1000, 1000, 1000)
-Using the data given in Table 14-3, how many employees do we expect in location A one year from now?

• A)1000
• B)1400
• C)1500
• D)800

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Definitions:

Depreciation Expense

The systematic allocation of an asset's cost over its useful life, reflecting the consumption or wear and tear of the asset.

Residual Value

The anticipated monetary value of an asset at the end of its operational life.

Units-Of-Production Depreciation

A depreciation method that allocates the cost of an asset over its useful life based on units produced rather than time, reflecting actual wear and tear.

Accumulated Depreciation

The total amount of depreciation expense allocated to a fixed asset since it was in service, reducing its book value on the balance sheet.