The Following Is a Payoff Table Giving Profits for Various

question 87

Multiple Choice

The following is a payoff table giving profits for various situations. The probabilities for states of nature A,B,and C are 0.3,0.5,and 0.2,respectively.If a person selected Alternative 1,what would the expected profit be?

• A)120
• B)133.33
• C)126
• D)180
• E)None of the above

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Definitions:

Net Income

The total profit or loss of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Net Working Capital

A financial metric that represents the difference between a company's current assets and its current liabilities.

Total Assets Ratio

A financial metric that compares the total assets of a company to its sales or revenues, indicating how efficiently a company uses its assets.

Uses of Cash

The various ways in which a company or individual allocates cash resources, including operating expenses, investments, and financing activities.