A Family Business Is Considering Making an Investment in Its

question 75

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 Hurwicz criterion with a coefficient of optimism equal to 0.80 would be to

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

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Definitions:

Mental Structures

The complex frameworks within the mind that are involved in organizing, interpreting, and making sense of information, according to theories of cognitive development.

Script

A sequence of expected behaviors, roles, and events in a particular context, helping individuals navigate social situations.

Genetic Influences

The impact that genes inherited from biological parents have on various traits or aspects of an individual, including physical appearance, personality, and susceptibility to certain diseases.

Mental State Terms

Vocabulary used to describe one's internal psychological and emotional conditions or the mental conditions of others.