In 1965,Fred Smith Wrote a Management Class Paper Proposing Reliable

question 36

Multiple Choice

In 1965,Fred Smith wrote a management class paper proposing reliable overnight delivery service.His professor gave him a C,because "the concept is interesting and well-formed,but in order to earn better than a C,[it] must be feasible." Smith ignored his professor's statement and founded Federal Express (FedEx) ,a company that is now worth more than $3 billion.Smith's professor wanted him to stick to business solutions that were proven,not come up with something "outside the box." In other words,Smith's professor was relying on a/an

• A) mental set.
• B) deductive approach.
• C) inductive approach.
• D) litmus test.

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Definitions:

Differential Revenue

The difference in revenue from one alternative to another, used in decision-making processes.

Differential Cost

The difference in cost between two alternative decisions, or the change in costs resulting from an increase or decrease in output.

Differential Revenue

The variation in income resulting from choosing between two different options or time frames.

Differential Effect

The financial impact of a business decision that results in changes to costs or revenue, compared to maintaining the status quo.