When the Availability of Each Alternative and Its Outcomes Are

question 7

Multiple Choice

When the availability of each alternative and its outcomes are associated with probability estimates, decisions are being made under a condition of

• A) certainty.
• B) uncertainty.
• C) risk.
• D) conflict.

---

Definitions:

Contribution Margin Ratio

The proportion of sales revenue that exceeds variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.

Operating Leverage

A measure of how revenue growth translates into growth in operating income and the degree to which a company can increase operating income by increasing revenue.

Break-Even Point

The point at which total costs match total earnings from production or sales, leading to neither a profit nor a loss.

Maintenance Costs

The expenses incurred to keep an asset in working condition or restore it to proper operation.