A Firm Is Considering a One-Time Sale of $100,000 to a Customer.The

question 22

Multiple Choice

A firm is considering a one-time sale of $100,000 to a customer.The cost of goods sold for this sale is $90,000.If the probability of the customer paying is 0.8,what is the expected profit from this transaction?

• A) Zero
• B) -$10,000
• C) +$8,000
• D) +$10,000

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Definitions:

Cost-Benefit Analysis

An economic school of jurisprudence in which all costs and benefits of a law are given monetary values. Those laws with the highest ratios of benefits to costs are then preferable to those with lower ratios.

Manufacturing Plant

A facility where goods are produced on a large scale using machinery, often involving assembly lines or automated processes.

Infrastructure

The fundamental facilities and systems serving a country, city, or area, including transportation, communication, utilities, and public services.

Precedent

A legal decision or case that establishes a principle or rule which courts may follow in future cases with similar issues.