Use the Information for the Question(s)below

question 38

Multiple Choice

Use the information for the question(s) below.
DM Skateboard company is planning to develop a new electric skateboard.In order for the project to be successful,the company must develop a new deck to accommodate a lightweight battery and a remote that is easy to operate while moving in an open environment.The company estimates the following costs,times,and probabilities of success for each component of the new skateboard: All three risks are idiosyncratic and the risk-free rate of interest is 5%.The company does not have the resources to develop all the components at the same time.Therefore,management needs to decide in what order to develop the technologies.
-What is the failure cost index of the battery technology?

• A)0.00375
• B)0.00392
• C)0.99875
• D)0.99892

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Definitions:

Foot-In-The-Door

A compliance tactic that involves getting a person to agree to a large request by first setting them up by having that person agree to a modest request.

Lowballing

A persuasion and negotiation tactic where an initially low offer is made to secure agreement, with subsequent increases after agreement has been obtained.

Risky-Shift

A phenomenon where a group collectively decides on a course of action that is more extreme than they would have made individually.

Deindividuation

A state of reduced individuality, reduced self-awareness, and reduced attention to personal standards; this phenomenon may occur when people are part of a group.