Which of the Following Statements Concerning Decision Trees Is False

question 37

Multiple Choice

Which of the following statements concerning decision trees is False?

• A)Decision nodes are represented by a square.
• B)Outcome nodes are represented by a circle.
• C)EMV is calculated at each outcome.
• D)The alternative is chosen with the highest EMV.
• E)Decision trees are solved by starting at the first decision node and moving forward.

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Definitions:

Tax Rate

The proportion of one's earnings or company profits that is required to be paid as tax.

Degree Of Financial Leverage (DFL)

A measure that evaluates the sensitivity of a company's earnings per share to fluctuations in its operating income, indicating financial risk.

Interest

The return on a debt investment.

Breakeven Volume

The number of units a company must sell to cover its fixed and variable costs, with no profit and no loss.