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yawa3891 [41]
3 years ago
15

Discuss decision making under conditions of uncertainty, specifically using expected monetary value

Business
1 answer:
IceJOKER [234]3 years ago
5 0

Answer with Explanation:

The decision making under the conditions of uncertainty:

Uncertainty is an unquantifiable outcome of a decision that can not be mathematically modeled whereas risk is a quantifiable outcome of a decision that can be mathematically modeled.

The expected value method helps in decision making related to uncertainty are making prudent estimates of cash flow by using expected value.

Expected value considers every outcome under uncertainty and computes all of the expected value for each outcome. The outcome that gives highest expected value is said to be best case and likewise the outcome that gives lowest expected value is said to be worst case.

Suppose that two projects gives the same expected value, then the decision will be based on the degree of uncertainty which means the project that has lowest uncertainty of returns will be our choice.

The deviation of the expected value from required return on a project can be measured as a Degree of uncertainty that helps in understanding to what extent the return will be not as per the expectation. The Precise Measurement of uncertainty can be calculated by inclusion of standard deviation to estimate expected value of the decision taken.

The expected money value is the monetary value that a particular decision will generate. In expected monetary value the decision is based on the weighted average of best case and worst case. The value derived is average thus the standard deviation would be very low which means that the calculation was precise. Decision trees are used in precise measurement of cash flow related to each expected outcome and deriving a weighted average value.

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timurjin [86]

Reputation.

If a company has a bad reputation of allowing the sale of counterfeit goods, buyers will not trust the site and will not buy from it.

3 0
3 years ago
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Despite your numerous emails and voicemail messages, a normally dependable vendor has not responded to your important question.
Bogdan [553]

Answer:

A) Consider sending a printed message.

Explanation:

According to the scenario, the most sensible step to get an important response from a supplier after the supplier has not responded would be to send a printed message.

This option would be ideal among the other alternatives above, as it demonstrates that you understand that the supplier may not have seen or been aware of your question, even if numerous e-mails have already been sent, and still awaits an answer , in accordance with professional and ethical communication standards.

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2 years ago
Beta Company leased equipment from Summer Industries. The lease agreement qualifies as a finance lease and requires annual lease
Tamiku [17]

Answer:

Total increase in pretax earnings on Summer’s December 31, 2019, income statement is $20,253

Explanation:

Fair value of asset sold on lease = Present value of lease payments = $50,000 * Cumulative PV factor at 6% for 8 periods of annuity due

= $50,000 * 6.20979

= $310,490

Interest income for 2019 = ($310490 - $50,000) * 6% = $15,629

Total increase in pretax earnings on Summer’s December 31, 2019, income statement = $310490 - $300,000 + $15,629 - 5866 = $20,253

3 0
3 years ago
If a customer is reluctant to try a new product because she’s afraid of what her friends might think, the company is most likely
Tanya [424]
The answer is the company is most likely facing a psychological barrier. If she's afraid to buy a product because she feels her friends will tease her if they find out, then that has to do with her mindset, which is a <span>psychological barrier for the company.</span>
4 0
3 years ago
If real GDP per person were equal to $2,620 in 1900 and grew at a 3 percent annual rate, what would be the value of real GDP per
gavmur [86]

If real GDP was 2630 and grew annually at 3%, The value of real GDP ten years later is going to be $67670

<h3>How to solve for real GDP </h3>

We have to start by starting the formula A = P(1+r)^n

We have P = principal = 2620

We have r as the rate of interest = 3% = 0.03

We have the number of years n = 110

We have to put these values in the formula we have

A= 2620(1+0.03)^110

= 67669.9

This is approximated to be

= 67670

Read more on Real GDP here:

brainly.com/question/17110800

#SPJ1

5 0
2 years ago
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