Answer:
Explanation:
The case study about the decision making ability of Stan Eagle from the beginning of the set up of the company till the time he faced problem after its inception. Stan Eagle who runs a skate company was losing money when he and his partner Pete Williams combined the business of clothing with the business of selling skateboards. Stan’s partner decided to sell other types of sports equipment which he thought will generate more revenues for the company. But Stan was disturbed as he thought it was better to focus on sports that they had most expertise and believed there was a way to bring out profit from those sports. This disturbance led Stan to become confused on whether to listen to his friend or move on with his own decision and eliminate Williams his partner from the business by buying his shares.
Question:
How do the characteristics of management decisions – uncertainty, risk, conflict, and lack of structure – affect the decision facing Stan Eagle?
A. Uncertainty
Uncertainty is a state whereby a decision maker have insufficient information on the consequences of his actions. For Stan Eagle, this uncertainty was a cause for worry whether or not the company will succeed or not as he has no expertise about the new product line. Even if he enters the market with the new products, there is a doubt on how well he can manage the new business as he knows nothing about these sports. Thus, there is a big question whether or not he will make profit from it. The company will surely be operating under conditions of uncertainty with the lack of adequate information and cannot estimate accurately about the results of his actions.
B. Risk
Risk is when the probability of an action being successful is less than 100 percent. If the decision is wrong, one may lose money, time, reputation or other important assets. Thus, accepting William’s proposal is a huge risk to take. It is a fact that risk takers are admired, the reality is that good decision makers prefer to manage risk and minimize it. Stan should accept that decisions have risky consequences, but he should do everything he can to anticipate minimize and control the risk.
C. Conflict
Stan experienced psychological conflict when William offers a new idea for their product line. The conflict happens when he has to deliberate on whether the option is attractive or not. Also, conflict arises between people in the company, Stan and William are partners and they both have different opinions thus bringing forth conflicts between them.
D. Lack of structure
In the case of Stan Eagle, he encountered a non – programmed decision. Stan Eagle's Company faced a dilemma whether it should or should not invest in the new product lines. The idea proposed by Pete Williams is a new area for the company and Eagle has no expertise or experience in this line of business.
Answer:
True
Explanation:
Partnerships are not taxed as individual entities, they work as pass through entities where the partners must report any gains or losses on their personal income filings.
In this case, since Aaron owns 25% of Eagle Company, any loss or gain that Eagle company has will be passed to Aaron in the same percentage. Since Eagle had a $10,000 short term capital loss, $2,500 ($10,000 x 25%) of the loss will pass to Aaron.
Answer:
The gain on retirement = $4,600
Explanation:
The gain or loss on retirement = Carrying Value of the Bonds - Call price of the Bonds
The gain or loss on retirement = $111,100 - $106,500
The gain on retirement = $4,600
Note: Par value will not be taken for the calculation of the above
Answer:
It has become more price inelastic
Explanation:
Elasticity of demand for any good can be defined as degree of responsiveness of any good with respect to change in demand factors like price or income. Hence it signifies consumer sentiments as how will the goods demand change when there is change in price.
Highly elastic goods mean that with slight change in price there is large change in demand of good.
Highly inelastic goods mean any change in demand factor like income, price will not affect the demand of the goods.
Now going for landlines telephone. With the widespread use of mobiles phones, usage of landline phones has decreased significantly. Hence any change in price for landlines is not going to affect it demand as very few people are using it.
Using the above mentioned rational we can say that It has become more price inelastic is the most suitable answer.
C: It tells the computer how to use the software.
