What Decision Should Be Made by the Conservative Decision Maker

question 39

Short Answer

$$\begin{array} { | c | c | c | c | } \hline & \text { s1 } & \text { s2 } & \text { s3 } \\\hline \mathrm { d } _ { 1 } & 10 & 8 & 6 \\\hline \mathrm { d } _ { 2 } & 14 & 15 & 2 \\\hline \mathrm { d } _ { 3 } & 7 & 8 & 9 \\\hline\end{array}$$
What decision should be made by the conservative decision maker?

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Definitions:

Installment Method

is an accounting technique used to recognize revenue and expenses over time as payments are made or received, rather than at the time of transaction.

Basis

The amount of an investment in property for tax purposes; used to calculate gain or loss on a sale or other disposition of the property.

Gain Recognized

The profit realized from the sale or exchange of an asset, which must be reported for tax purposes.

Involuntary Conversion

Involuntary conversion is the process whereby property is destroyed, stolen, condemned, or disposed of under the threat of condemnation, and the owner receives compensation or insurance recovery.