A Family Business Is Considering Making an Investment in Its

question 97

Multiple Choice

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation: The best decision for the business using the maximax criterion would be to

• A) make the large investment.
• B) make the medium investment.
• C) make the small investment.
• D) choose increasing demand.

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Definitions:

Pediatrician

A medical doctor specializing in the care, diagnosis, and treatment of children’s diseases and conditions from infancy through adolescence.

Gynecologist

A medical doctor specializing in the health of the female reproductive system, including diagnosis, treatment, and care of related diseases and conditions.

Pathologist

A medical professional who studies the causes and effects of diseases, especially by examining body tissues and fluids.

Gastroenterologist

A medical doctor specialized in diagnosing and treating diseases of the gastrointestinal tract, which includes the stomach, intestines, and associated organs.