A Firm Is Considering the Decision of Investing in New

question 32

Multiple Choice

A firm is considering the decision of investing in new plants.It can choose no new plants,one new plant,or two new plants.The following table gives the profits for each choice under three states of the economy.The manager assigns the following probabilities to each state of the economy: the economy expands,20%,the economy contracts,40%,or the economy is unchanged 40%. Using the coefficient of variation rule,the firm should build

• A)no new plants.
• B)one new plant.
• C)two new plants.
• D)cannot tell with this information

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Definitions:

No-Layoff Policies

Employer commitments or agreements that aim to avoid terminating employment due to economic downturns, often through alternative strategies such as work sharing or temporary leave.

Electronic Communication

The transfer of information or messages between individuals or groups using electronic devices such as computers, phones, and email.

Handbooks

Manuals or guidebooks that provide information on policies, procedures, and standards within an organization or for a specific product.

Manuals

Instructional guides or reference books that provide instructions, information, or guidance on how to operate devices, perform tasks, or follow procedures.