A Family Business Is Considering Making an Investment in Its

question 13

Multiple Choice

A family business is considering making an investment in its manufacturing operation.Three decisions are under consideration: (1) a large investment; (2) a medium investment;and (3) a small investment.The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand;and (3) decreasing demand.The business believes that the probability for increasing,stable and decreasing product demand are 0.4,0.5,and 0.1,respectively.The following payoff table describes the decision situation.

The expected value for the medium investment decision is

• A)$600,000
• B)$540,000
• C)$330,000
• D)$165,000

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Definitions:

Heart Using

This is not a recognized key term and appears to be incorrectly phrased or out of context.

Intradermal Test

An allergy test in which dilute solutions of allergens are introduced into the skin of the inner forearm or upper back with a fine-gauge needle.

Subcutaneous Test

is a medical diagnostic procedure that involves injecting a substance just beneath the skin to test for an allergic or immune response.

Fine-Gauge Needle

A very thin needle used for injections, reducing discomfort and tissue damage.