Tony BIs Attempting to Start a Landscaping Business

question 29

Multiple Choice

Tony B.is attempting to start a landscaping business.He estimates that to break-even,he will need about 140 customers.He believes he will lose approximately $500 per customer for each customer fewer than the 140.At the moment,he believes that there is an 80% probability that he will be able to secure at least 130 customers and that there is a 50/50 chance that demand will be greater than 150 customers.He has several marketing research firms offering (for a price,of course) to conduct a survey that will provide additional information regarding the probability of demand.How much should he be willing to spend if he decides to have a survey made?

• A)≅ $4,000
• B)≅ $3,000
• C)≅ $5,000
• D)≅ $2,700
• E)None of the above

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Definitions:

Contingencies

Events or conditions that might occur in the future and can affect the outcome of planning or decision-making.

Risk of Conflict

The potential for disagreements, disputes, or confrontations to arise between individuals or groups.

Satisficing

A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution, due to constraints.

Systematic Evaluation

A structured process of assessing the performance, effectiveness, or quality of a system, program, or project using specific criteria and methodologies.