Suppose You Are Given the Following Preference Information: A: (0

question 34

Multiple Choice

Suppose you are given the following preference information: a: (0, 1, 0: 3000, 2000, 1000) is indifferent to b: (3/4, 0, 1/4: 3000, 2000, 1000) . Given the prospects c: (1/3, 1/3, 1/3: 3000, 2000, 1000) and c: (1/2, 1/4, 1/4: 3000, 2000, 1000) , which of the following statements is true?

• A)d is preferred to c
• B)c is indifferent to d
• C)c is preferred to d
• D)A preference ranking cannot be found with the given information.

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that reduces total receivables to reflect the estimated uncollectible amounts.

Specific Customer

A particular or individual client to whom products or services are sold or provided.

Allowance Method

An accounting technique that estimates and deducts accounts receivable that may not be collectible, to more accurately represent a company's financial position.

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal, used in valuing inventory to reflect the net amount that can be realized.