You Are Employed as a Commission-Based Sales Clerk for a Cosmetics

question 17

Multiple Choice

You are employed as a commission-based sales clerk for a cosmetics retail store. You know that on average; exactly 50 percent of the customers that enter your store will make at least one purchase.
Thus far this morning, you have waited on eight customers without making a single sale. You are
Convinced that the next customer you wait on will buy something. This belief is known as:

• A) Aversion to ambiguity.
• B) The law of small numbers.
• C) Anchoring and adjusting.
• D) Gambler's fallacy.
• E) False consensus.

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Definitions:

Discount Rate

In finance, it is the interest rate used to determine the present value of future cash flows. In monetary policy, it's the rate at which commercial banks borrow from the central bank.

Salvage Value

This is the estimated residual value of an asset at the end of its useful life.

Net Operating Cash Flows

Refers to the cash generated from a company's core business operations, excluding cash flows related to financing and investing activities.

Payback Period

The duration needed to recover the cost of an investment, typically measured in years or months.