Fairco,a Family Business,is Considering Making an Investment in Its Manufacturing

question 28

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:

Energy Independence

The condition of a nation being able to meet all its energy needs without having to import fuels or energy from other countries.

U.S. Policy

The strategic decisions and actions taken by the United States government to address domestic and international issues.

Crime Rates

Statistics that measure the occurrence of crimes within a given area over a specified period, often used to assess safety and enforcement effectiveness.

Mid-nineteenth Century

Refers to the time period between 1850 and 1869, marking the middle of the 19th century.