​Match Each of the Following Situations with the Concept It

question 64

Multiple Choice

​Match each of the following situations with the concept it most clearly illustrates.
-satisficing

• A)Hugh needs to buy a new laptop.He searches online until he finds the first laptop that fits his price and performance needs, then he immediately buys it.
• B)In a hand of poker, Kevin makes a bid and Julie calls.Later, Kevin makes a higher bid, and Julie calls again.At the end of the hand, when Julie goes all in, Kevin's almost certain she has the better cards.However, because he's already invested so much in the hand, Kevin feels obliged to call.
• C)On paper, the candidate seems excellent, so Nina invites him for an interview, which goes swimmingly.Still, something about the guy seems "off" to Nina, and though she can't put her finger on what it is, she hires someone else.
• D)Simone knows that the laptop she's about to buy from the electronics store is both more expensive and of lower quality than a laptop she could buy online.However, she desperately needs a laptop immediately, so goes ahead with the purchase.

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Definitions:

Plowback Ratio

The proportion of earnings retained by a company after dividends have been paid, often reinvested in the business for growth.

P/E Ratio

The P/E Ratio (Price-to-Earnings Ratio) is a metric used to value a company by dividing its current share price by its earnings per share, indicating how much investors are willing to pay for each dollar of earnings.

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Interest Expense

The cost incurred by an entity for borrowing funds, represented as a charge against its earnings or net income.