Which of These Assumptions Are Included in the Classical Model

question 51

Multiple Choice

Which of these assumptions are included in the classical model of decision making?

• A) Problems are unstructured and ill defined.
• B) The decision-maker strives for conditions of certainty.
• C) Criteria for evaluating alternatives are unknown.
• D) The decision-maker selects the alternatives that will minimize the economic return to the organization.
• E) The situation is always uncertain.

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Definitions:

Net Operating Income

An indicator of a firm's earnings generated from its principal business activities, not accounting for interest and tax deductions.

Variable Costing

An accounting method that includes only variable production costs in product costs, excluding fixed overhead.

Absorption Costing

An accounting strategy that considers every manufacturing expense, including direct materials, direct labor, and overhead costs (both variable and fixed), in determining a product’s cost.

Income Statement

A financial statement that shows a company's revenue, expenses, and profits over a specific period, usually a fiscal quarter or year.