The Table Below Shows the Payoff Matrix in the Form

question 20

Multiple Choice

The table below shows the payoff matrix in the form of short term profits for two firms,A and B,for two different strategies,investing in new capital or not investing in new capital.Payoffs are in millions of dollars. $\begin{array}{c}\quad \quad \quad \quad \quad \quad \quad \text { Firm } B\\\text { Firm } A\begin{array}{|l|l|l|}\hline& \text { Invest } & \text { Not Invest } \\\hline {\text { Invest }} & \$ 20 \text { for } \mathrm{A} & \$ 70 \text { for } \mathrm{A} \\& \$ 20 \text { for } \mathrm{B} & \$ 5 \text { for } \mathrm{B} \\\hline{\text { Not Invest }} & \$ 5 \text { for } \mathrm{A} & \$ 50 \text { for } \mathrm{A} \\& \$ 70 \text { for } \mathrm{B} & \$ 50 \text { for } \mathrm{B} \\\hline\end{array}\end{array}$
Refer to the figure above.For Firm A,_____ is its dominant strategy,and for Firm B,______ is its dominant strategy.

• A)investing;not investing
• B)not investing;investing
• C)investing;investing
• D)not investing;not investing

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Definitions:

Depreciation Schedule

A table that shows the reduction in value of a company's assets over time.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Sales

The total amount of goods or services sold by a company, contributing to its revenue.