Answer the following statement(s) true (T) or false (F)
1. When monetary value is not the sole measure of the true worth of the outcome to the decision maker, monetary value should be replaced by utility.
2. Utility is the term for a measure of the total worth or relative desirability of a particular outcome.
3. As long as the monetary value of payoffs stays within a range that the decision maker considers reasonable, selecting the decision alternative with the best expected value usually leads to selection of the most preferred decision.
4. The expected utility is the utility of the expected monetary value.
5. A risk avoider is a decision maker who would choose a guaranteed payoff over a lottery with a superior expected payoff.
1. True
2. True
3. True
4. False
5. True
You might also like to view...
Hallie has worked at her financial services company for several years when she realizes that her department is creating false accounts to make itself look more profitable. Though she sees this clearly, she chooses not to report the issue to anyone. Why might she have made this choice?
What will be an ideal response?
On January 1 of the current year, Jimmy's Sandwich Company reported stockholders' equity totaling $131,500. During the current year, total revenues were $113,000 while total expenses were $102,500. Also, during the current year paid $37,000 in cash dividends. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $213,000, the change in total stockholders' equity during the year was:
A. A decrease of $47,500. B. An increase of $47,500. C. A decrease of $26,500. D. An increase of $81,500 E. An increase of $26,500.
The underlying premise of the support business strategy is that the greater the alignment between the organization and the compensation system, the more effective the organization.
Answer the following statement true (T) or false (F)
A(n) ________ is the internal charge by one organizational unit for a good or service that it supplies to another unit.
A. market control B. transfer price C. balanced scorecard D. outsource item E. bureaucratic control