Refer to the Information Provided in Figure 17

question 34

Multiple Choice

Refer to the information provided in Figure 17.2 below to answer the question(s) that follow. Figure 17.2
-Refer to Figure 17.2. Sam has two job offers when he graduates from college. Sam views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $60,000. The second offer is at a fixed salary of $30,000 plus a possible bonus of $60,000. Sam believes that he has a 50-50 chance of earning the bonus. If Sam takes the offer that maximizes his expected utility and is risk-neutral, which job offer will he choose?

• A) Sam will take the first offer.
• B) Sam will take the second offer.
• C) Sam is indifferent between the offers-both yield the same expected utility.
• D) Indeterminate from the given information.

---

Definitions:

Ingredients

Components or elements combined in the preparation of a particular dish or product.

Value Engineering

A systematic method to improve the "value" of goods or products and services by using an examination of function.

Product Design

The process of creating a new product to be sold by a business to its customers, involving concept development, solution sketching, prototyping, and testing.

Value Analysis

A methodical approach to identify and eliminate unnecessary costs in product design and manufacturing without sacrificing functionality or quality.