Exhibit 14.8 The Following Questions Use the Information Below

question 15

Multiple Choice

Exhibit 14.8
The following questions use the information below.
A company needs to buy a new insurance policy. They have three policies to choose from, A, B and C. The policies differ with respect to price, coverage and ease of billing. The company has developed the following AHP tables for price and summary. The other tables are not shown due to space limitations.
-Refer to Exhibit 14.8. What formula should go in cell C7 and get copied to D7:E7 of the Summary worksheet to compute the Weighted Average Score?

• A) =SUMPRODUCT(C4:E4,$G$4:$G$6)
• B) =SUMPRODUCT(C4:C6,$C$5:$C$7)
• C) =SUMPRODUCT($G$4,$G$6)
• D) =SUMPRODUCT(C4:C6,$G$4:$G$6)

---

Definitions:

Prepaid Item

An expense paid in advance before receiving the benefit of the service or good.

Accrued Liability

A financial obligation that a company has incurred but has not yet paid out or recorded in its financial statements.

Accrual Basis

An accounting method where income and expenses are recorded when they are earned or incurred, regardless of when the cash is received or paid.

Cash Basis

An accounting method where revenues and expenses are recorded only when cash is received or paid out.