Kate's firm does marketing research studies for film production companies, and this week they showed carefully selected test audiences a soon-to-be released blockbuster called Love, Explosions, and Laughter. Afterward they presented participants with a series of questions, including one that asked them to rate their favorite movie of all time. Production company executives were thrilled to see that viewers rated Love, Explosions, and Laughter higher than such classics as Citizen Kane and The Wizard of Oz, but most likely the reason for this was a decision-making bias known as
A. representativeness.
B. framing.
C. recency.
D. anchoring.
E. contrast.
Answer: C
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In converting income statement amounts to statement of cash flow amounts, which of the following is true?
a. A increase in taxes payable would be subtracted from net income. b. Amortization of an intangible asset would be subtracted from net income. c. A increase in accounts payable would be added to net income. d. An increase in prepaid expense would be added to net income.
Wasted capacity (or inventory) occurs when
A) there are excessive cancellations. B) there are few cancellations. C) an expensive backup needs to be arranged. D) all of the above
Can an investment project of a foreign subsidiary that has a positive net present value when evaluated as a stand-alone firm ever be rejected by the parent corporation?
Assume that the parent accepts all projects with positive adjusted net present values.
To comply with the Clean Water Act, businesses that discharge wastes into a waterway must:
a. follow the requirements of the State Implementation Plan b. install the lowest achievable emissions rate technology by 2009 (or sooner if feasible) c. obtain a discharge permit and meet the effluent limits set by EPA for each chemical d. dispose of liquid wastes by strictly following common industry practices e. comply with the specific terms of its PSD permit