Trey Leeman,Operations Manager at National Consumers,Inc

question 6

Multiple Choice

Trey Leeman,Operations Manager at National Consumers,Inc.(NCI) ,is evaluating alternatives for increasing capacity at NCI's Fountain Hill plant.He has identified four alternatives,and has constructed the following payoff table which shows payoffs (in $1,000,000's) for the three possible levels of market demand. The opportunity loss for the combination "Purchase New Equipment" and "Low" is ____.

• A)0.5
• B)1.5
• C)2.5
• D)3.0
• E)3.5

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Definitions:

Subsidiary

A company that is controlled by another company, typically referred to as the parent company, through ownership of more than half of its voting stock.

Partnership

A legal form of business operation between two or more individuals who share management and profits or losses.

Trading Investments

Securities bought and held primarily for selling them in the short term to profit from price fluctuations.