The Millard Division's Operating Data for the Past Two Years

question 45

Multiple Choice

The Millard Division's operating data for the past two years are provided below:
Millard Division's margin in Year 2 was 150% of the margin in Year 1.
-The net operating income for Year 1 was:

• A) $240,000
• B) $256,000
• C) $384,000
• D) $768,000

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Definitions:

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, often referred to as the "I knew it all along" phenomenon.

Representativeness Heuristic

A cognitive shortcut where the likelihood of an object belonging to a category is judged based on how typical the object appears to be of that category.

Phases of Decision Making

Describes the sequence of steps from identifying a problem or opportunity, through to the final choice and its implementation.

Gambler's Fallacy

The incorrect belief that future probabilities are altered by past events, often found in contexts of betting and decision-making.