Which element below is not one of the types of heuristics mentioned in the textbook?
a. Availability
b. Projection
c. Representativeness
d. Anchoring and adjustment
b. Projection
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The equation that allows us to compare dollar amounts to be received at different dates is the
A. present-value formula. B. Taylor rule. C. interest-rate parity equation. D. ?Roy's identity
Mark M. Upp has just been fired as the university book store manager for setting prices too low (only 20 percent above suggested retail). He is considering opening a competing bookstore near the campus, and he has begun an analysis of the situation
There are two possible sites under consideration. One is relatively small, while the other is large. If he opens at Site 1 and demand is good, he will generate a profit of $50,000. If demand is low, he will lose $10,000. If he opens at Site 2 and demand is high he will generate a profit of $80,000, but he will lose $30,000 if demand is low. He also has decided that he will open at one of these sites. He believes that there is a 50 percent chance that demand will be high. He assigns the following utilities to the different profits: U(50,000 ) = ? U(-10,000 ) = 0.22 U(80,000 ) = 1 U(-30,000 ) = 0 For what value of utility for $50,000, U(50000), will Mark be indifferent between the two alternatives?
Which of the following does not have to be paid out of your estate before distribution to your heirs?
A) Legal fees B) Funeral expenses C) Outstanding debt D) Estate and inheritance taxes E) All of the above must be paid prior to the distribution of assets.
Prince Company acquires Duchess, Inc. on January 1, 2016. At the date of acquisition, Duchess has long-term debt with a fair value of $1,500,000 and a carrying amount of $1,200,000.With respect to long-term debt consolidation worksheet adjustments in periods following the acquisition, which of the following is correct:
A. Debit Interest Expense and Credit Long-Term Debt Expense. B. Do not adjust the value of the debt because Prince is not obligated to repay the debt. C. Prince must recognize an increase in interest expense if the amount is material. D. Credit Long-Term Debt and Debit Interest Expense on the balance sheet of Duchess. E. Debit Long-Term Debt and Credit Interest Expense.