Which of the Following Statements Is Likely to Be Correct

question 91

Multiple Choice

Which of the following statements is likely to be correct for a decision tree which indicates a 30 percent chance of making a $250,000 profit and a 70 percent chance of sustaining a $140,000 loss?

• A)The decision should be "yes" whenever the amount of possible profit exceeds the amount of possible loss
• B)The decision should be "no" whenever there is a possibility of loss
• C)The expected value is positive before discounting
• D)The expected value is negative before discounting

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Definitions:

Related Diversification

A strategy where a business expands its activities into areas that are similar to its existing operations.

Organisational Growth

The process by which an organization increases in size, resources, capabilities, or market share over time.

Core Competencies

Fundamental strengths and abilities of a company that give it a competitive advantage.

Organisational Strength

The capabilities and resources that give an organization a competitive edge or superior performance ability.