The National Sales Manager for "I Colored This" (ICT) T-Shirts

question 68

Multiple Choice

The national sales manager for "I colored this" (ICT) T-shirts, provides all salespersons with the payoff table shown below, giving the estimated profit when a retailer purchases from 1 to 4 dozen T-shirts. The probability of demand for each state of nature is also shown. How many dozen "I colored this" T-shirts should be purchased to yield the highest payoff?

• A) 1
• B) 2
• C) 3
• D) 4

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Definitions:

End of the period

Refers to the conclusion of an accounting period, at which financial statements are prepared.

Net realizable value

The estimated selling price of goods, minus the cost of their sale or disposal.

Damaged merchandise

Goods that have been physically harmed or impaired, reducing their value or usefulness.

Below cost

describes selling a product at a price less than its production or acquisition cost, often to clear inventory or attract customers.