An Entrepreneur Gathers the Following Information to Make a Decision

question 53

Multiple Choice

An entrepreneur gathers the following information to make a decision on whether to stay open for business or to shut down permanently:
Future operating revenues = $18 million
Future operating costs = $14 million
Sunk costs = $8 million
The entrepreneur should:

• A) continue to operate because the operating revenues exceed the operating costs.
• B) shut down because the operating revenues are insufficient to cover the operating costs and sunk costs.
• C) shut down because the sunk costs are greater than zero.
• D) continue to operate to help pay off the sunk costs.

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Definitions:

Voicemail

An electronic system that allows messages to be stored and retrieved later by the intended recipient.

Systematic Sensitization

A therapeutic process designed to gradually expose an individual to a feared stimulus to decrease their anxiety response.

Cognitive Mechanics

Refers to the underlying biological processes related to brain function, such as processing speed, attention, memory, and problem-solving abilities.

Developmental Restructuring

Refers to changes made within an organization or system aimed at improving its effectiveness by altering its structure, processes, or interactions.