In a Decision Tree,caution Should Be Used in the Analysis

question 79

Multiple Choice

In a decision tree,caution should be used in the analysis because:

• A)later stage decisions are probably riskier than earlier stages.
• B)negative NPVs should never occur.
• C)all real options must be included in the basic tree.
• D)failure and its probability should be ignored because they are irrelevant.
• E)early stage decisions are probably riskier than later stages.

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed, showcasing how much tax will be paid on an additional dollar of income.

Taxable Income

The amount of an individual's or corporation's income used to determine how much tax is owed to the federal government.

Taxes

Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Sales And Excise Taxes

Sales and excise taxes are forms of indirect taxation imposed on the sale of certain goods and services, where excise taxes are often levied on specific products like tobacco or alcohol.