Use the Following Data to Answer Questions 88-100 -Refer to the Data on Expected Demand for Weston Gadgets,Inc

question 94

Multiple Choice

Use the following data to answer questions 88-100. $$\begin{array}{l} \quad \quad \quad \quad \quad \quad \quad \quad \text { Expected Demand for Weston Gadgets, Inc. }\\\begin{array} { | l | l | l | l | } \hline \text { Decision Alternative } & \text { Low 35\% } & \text { Medium 30\% } & \text { High 35\% } \\\hline \text { Outsource } & \$ 16.00 \text { million } & \$ 28.00 \text { million } & \$ 66.00 \text { million } \\\hline \text { Build capacity } & \$ 4.00 \text { million } & \$ 32.00 \text { million } & \$ 26.00 \text { million } \\\hline \text { Do nothing } & \$ 9.00 \text { million } & \$ 18.00 \text { million } & \$ 66.00 \text { million } \\\hline\end{array}\end{array}$$
-Refer to the data on Expected Demand for Weston Gadgets,Inc.For the various demand scenarios,if you applied the Laplace criterion,what is the lowest payoff?

• A)$39.33 million
• B)$34.00 million
• C)$31.33 million
• D)$43.33 million

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Definitions:

Term Deposits

Fixed-term savings accounts that typically offer higher interest rates, where money is locked in for a certain period.

Surplus Funds

Excess money or assets that remain after all expenses have been paid.

Maturing

The process by which a financial instrument reaches its due date and the principal is required to be repaid.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the principal.