John Is Trying to Decide Whether to Expand His Business

question 98

Multiple Choice

John is trying to decide whether to expand his business or not.If he continues his business as it is,with no expansion,there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000.If he does expand,there is a 30 percent chance he will earn $100,000,a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000.It will cost him $150,000 to expand.If John decides to expand,it means:

• A)the difference in expected earnings from expanding versus not must exceed $150,000.
• B)the sum in expected earnings from expanding and from not must exceed $150,000.
• C)the difference in expected earnings from expanding versus not must not exceed $150,000.
• D)his expected earnings from expansion must exceed $150,000.

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Definitions:

Case Management

A collaborative process of assessment, planning, facilitation, and advocacy for options and services to meet an individual's holistic needs through communication and available resources to promote quality cost-effective outcomes.

HMO

A Health Maintenance Organization, a type of health insurance plan that limits coverage to care from doctors who work for or contract with the HMO.

Medical History

A record of a person's past illnesses, surgeries, treatments, and health conditions, often used by healthcare providers for diagnosis and treatment planning.

Health Care Costs

The expenses associated with medical services, treatments, and procedures provided to maintain or improve a person’s health.