As the Buyer for Your Business, You Can Choose to Buy

question 8

Multiple Choice

As the buyer for your business, you can choose to buy an extended warranty for each new computer for $200 each. During this period, each computer will experience either a minor ($100) or major ($500) repair bill. Repairs for each computer under warranty are reduced by 50% to $50 or $250. Assume the computer company wants to make as much money as possible, and you wish to spend as little as possible. What is the computer company's optimal strategy?

• A) Always sell the warranty.
• B) Never sell the warranty.
• C) Sell the warranty for less than half of the computers.
• D) Sell the warranty for more than half of the computers.

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Definitions:

Conscious Decisions

Choices made with full awareness and deliberation, involving thoughtful consideration and an understanding of the consequences.

Heredity

The genetic transmission of characteristics from parents to offspring.

Moral Conduct

The behavior of an individual that is in alignment with moral or ethical principles, governing the distinction between right and wrong actions.

External Locus Of Control

The belief that one's successes or failures result from external factors beyond their control, rather than personal actions.