Leland-Morgan Consulting Is Considering a Project and Its Analysts Have $\text { OUTCOME\quad PROBABILITY OF OUTCOMEASSUMPTIONS }$

question 53

Multiple Choice

Leland-Morgan Consulting is considering a project and its analysts have projected the following outcomes and their probabilities.
$\text { OUTCOME\quad PROBABILITY OF OUTCOMEASSUMPTIONS }$
$\begin{array}{llc}\$ 6,000 &\quad\quad\quad\quad 25 \% & \text { pessimistic } \\\$ 8,000 &\quad\quad\quad\quad 40 \% & \text { moderately successful } \\\$ 10,000 &\quad\quad\quad\quad 35 \% & \text { optimistic }\end{array}$
-What is the standard deviation of the outcomes?

• A) $2,850
• B) $4,200
• C) $1,536
• D) cannot be determined with the information given

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Definitions:

Total Revenue Product

The total revenue generated from selling the output produced by an additional unit of a factor of production, such as labor or capital.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, assuming other factors remain constant.

Wage Rate

The standard amount of compensation that employees receive in exchange for performing a specific task or job per time period.

Substitution Effect

The adjustment in purchasing behaviors as a result of variations in the comparative costs of products, prompting buyers to switch from one item to another that is either cheaper or more costly.