King, Inc, a Successful Midwest Firm, Is Considering Opening a Branch

question 54

Essay

King, Inc., a successful Midwest firm, is considering opening a branch office on the west coast. Under normal economic conditions, with a 45% probability of occurring, King can expect to earn a net income of $70,000 per year. In a mini-recession, at 25% probability, King will earn $20,000. In a severe recession, at a 20% probability, King will lose $15,000. There is also a slight probability (10%) that King will lose $300,000 if the expansion fails and the branch office must be closed. Should King open a branch office in California based on these assumptions?

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Definitions:

Orientalism

A framework of understanding and depicting cultural representations of the East by the West, marked by a broad sense of difference, exoticism, and superiority.

East-West Distinction

A geopolitical and cultural division historically separating oriental (Eastern) and occidental (Western) societies based on differing cultural, social, and economic characteristics.

Academic Field

A branch of knowledge that is studied or researched at the higher education level.

Biological Identity

The aspects of an individual's identity that are determined by physical and genetic characteristics.