Suppose an Individual Faces a Decision of Whether or Not

question 4

Essay

Suppose an individual faces a decision of whether or not to make an investment 2 years from now.The investment will cost $10,125, and it will yield a benefit b 2 years later.
a.Suppose the individual treats a dollar 1 year from now the same way as $0.90 now.How low can b be for this individual to plan to make the investment in two years?
b.Now suppose that the individual's tastes are better characterized by the beta-delta model.Suppose delta is 0.9.For what values of beta will the individual plan the same course of action 2 years from now as he would in the typical delta model (with the same delta)?
c.Suppose beta is 0.9 (with delta also equal to 0.9).How low can b be in order for the individual to be willing to undertake the investment when he faces the choice in 2 years?
d.For what range of values for b does the individual from (c) plan to undertake the investment but then decides not to when the time comes?

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Definitions:

Customer Objection

Concerns or reasons a customer might offer for not purchasing a product or service.

"Yes, But..."

A conversational technique often used to acknowledge a point before introducing an objection or alternative perspective.

Objection Handling Method

Techniques used in sales and negotiation to overcome or address objections raised by potential customers.

Sculpture Logistics

The detailed coordination necessary for transporting, handling, and storing sculptures, ensuring their preservation and safety.