Which of the Following Statements Is Likely to Be Correct

question 55

Multiple Choice

Which of the following statements is likely to be correct for a decision tree that indicates a 30% chance of making a $250,000 profit and a 70% 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:

Original Offer

The initial proposal or price presented to potential buyers in a deal or transaction.

New Terms

Freshly introduced or revised conditions or stipulations in a contract or agreement.

Standard Order Form

A predefined template used by businesses to facilitate the easy and consistent placing of orders by customers.

Materially Alter

To make significant changes to a document or object that could affect its value, function, or meaning.