When Managers Know the Possible Outcomes of a Decision and Can

question 81

Multiple Choice

When managers know the possible outcomes of a decision and can assign probabilities to each of these outcomes in terms of their likelihood of occurrence in the future, this is known as

• A)uncertainty.
• B)certainty.
• C)risk.
• D)bounded rationality.

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Definitions:

Periodic Basis

A method of accounting where financial and inventory records are updated at regular, fixed intervals.

Resale Value

The expected price at which an asset can be sold in the market after it has been used.

Incremental Costs

The additional costs incurred when a company increases production by one unit.

Special Order

An order that deviates from the normal production process or product line, often requiring special pricing and handling.