Fairco, a Family Business, Is Considering Making an Investment in Its

question 21

Multiple Choice

Fairco, a family business, is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation. The best decision for Fairco using the maximax criterion would be to

• A) make the large investment.
• B) make the medium investment.
• C) make the small investment.
• D) choose increasing demand.

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Definitions:

Participants

Individuals who take part in an activity or event.

Meeting Room

A designated space designed for gatherings or conferences where individuals come together to discuss issues, make decisions, or share information.

Collaborative Work

Efforts undertaken jointly by two or more people or groups to achieve a common goal.

Individual Responsibilities

Duties or tasks that are assigned to a particular person in a group or organization.