Which of the Following Is a Feature of the Expected-Value

question 31

Multiple Choice

Which of the following is a feature of the expected-value standard?

• A) It helps the decision taker to choose the course of action that involves the maximum risk and return.
• B) It cannot be employed in situations involving multiple and related risks.
• C) It is employed for short-term, one-time decisions involving high risks.
• D) The expected value of a risky prospect represents the average monetary outcome if it were repeated indefinitely.
• E) The expected-value standard is appropriate for playing short-run averages.

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Definitions:

Perpetual Inventory System

A system for tracking inventory accounting that instantly logs each sale or acquisition of inventory through computerized point-of-sale systems and software for managing enterprise assets.

LIFO

A rephrased definition: An accounting approach to inventory and cost of goods sold valuation that assumes the most recently acquired items are the first to be sold.

Ending Inventory

The value of goods available for sale or use at the end of an accounting period.

Net Realizable Value

The projected sales price of products subtracted by the cost associated with their sale or disposal.