A Family Business Is Considering Making an Investment in Its

question 24

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 small investment decision is

• A)$540,000
• B)$400,000
• C)$330,000
• D)$165,000

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Definitions:

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Implicit Memory

Unconscious memory: subjects can demonstrate knowledge, such as a skill, conditioned response, or recall of events on prompting but cannot explicitly retrieve the information.

Verbal Tasks

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