Assume That You Have a Riding Lawn Mower That Is

question 4

Multiple Choice

Assume that you have a riding lawn mower that is in need of repairs.You can choose to repair or replace it.You are interested in your net cost over the next two years.If you choose to repair,it will cost $300 and there is a 50/50 chance of whether or not it will need additional repairs within the next two years.If it does need additional repairs,there is a 40 percent chance of needing another $400 of repairs,and a 60 percent chance of needing another $200 of repairs.At the end of the two years you estimate that the repaired mower would be worthless. If you choose to replace the mower by trading in the old mower,the cost after deducting the trade in value is $1500.At the end of the two years you estimate there is a 75 percent chance you could resell it for $1000,and a 25 percent chance that you can resell it for $1300.
What is the expected value of repairing the mower?

• A)A cost of $300
• B)A cost of $400
• C)A cost of $440
• D)A cost of $290

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Definitions:

Resistance To Change

Refers to opposition or pushback by individuals or groups within an organization when they perceive that a change is threatening their norms, beliefs, procedures, or interests.

Organizational Development

An area of study and application focused on enhancing people's understanding and capability in achieving better organizational change and performance outcomes.

Sensitivity Training

A type of program designed to raise awareness of group dynamics and any existing prejudices toward others.

Workplace Behaviors

Actions and interactions of individuals within a workplace setting, which can influence the work atmosphere, productivity, and organizational culture.