The Local Operations Manager for the Internal Revenue Service Must

question 78

Multiple Choice

The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows:

If she feels the chances of low, medium, and high compliance are 20 percent, 30 percent, and 50 percent respectively, what is her expected value of perfect information?

• A)$16,000
• B)$26,000
• C)$46,000
• D)$48,000
• E)$50,000

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Definitions:

U.S. Constitution

The supreme law of the United States that establishes the national framework of government and the fundamental rights of citizens.

Involuntary Dissolution

The compulsory termination of a corporation's existence or the discontinuation of its operations by legal authority, often due to failure to comply with certain laws or obligations.

Corporate Expansion

The process of a company increasing its business operations and market presence, which may involve opening new locations, acquiring other businesses, or expanding its product or service offerings.

Sherman Antitrust

A landmark federal statute in the U.S. passed in 1890, which outlaws monopolistic business practices.