Question : 21) What would be the expected monetary value for the : 1186247

 

21) What would be the expected monetary value for the following data using the probability method?

 

Probability

Cash Inflows

0.15

$200,000

0.25

$175,000

0.30

$160,000

0.40

$0

 

A) $535,000

B) $250,000

C) $121,750

D) $200,000

E) $30,000

 

Use the information below to answer the following question(s).

 

Joan Perry has three booth rental options at the bridal fair where she plans to sell her new product. The booth rental options are:

 

Option 1: $4,000 fixed fee

Option 2: $3,000 fixed fee + 5% of all revenues generated at the fair

Option 3: 20% of all revenues generated at the fair.

The product sells for $150 per unit. She is able to purchase the units for $50.00 each.

 

22) How many actions and alternatives exist in this situation?

A) 1 action and 3 alternatives

B) 1 action and 1 alternative

C) 2 actions and 3 alternatives

D) 3 actions and 3 alternatives

E) 3 actions and 1 alternative

23) Which option should Joan choose in order to maximize income assuming there is a 40% probability that 70 units will be sold and a 60% probability that 40 units will be sold?

A) Option one with expected operating income of $1,200

B) Option two with expected operating income of $1,810

C) Option three with expected operating income of $3,640

D) Option three with expected operating income of $4,160

E) Option two with expected operating income of $4,060

 

Use the information below to answer the following question(s).

 

Dr. Mickey Finn performs a certain procedure for $400.00. The fixed costs are $8,000 and variable costs are $200.00 per procedure.

 

24) What is the budgeted revenue assuming the procedure is performed 200 times?

A) $40,000

B) $80,000

C) $120,000

D) $160,000

E) $320,000

 

25)  What is the budgeted contribution margin assuming the procedure is performed 200 times?

A) $20,000

B) $30,000

C) $8,000

D) $80,000

E) $40,000

26) What is the margin of safety assuming the procedure is performed 200 times?

A) $80,000

B) $64,000

C) $40,000

D) $32,000

E) $16,000

 

27) What is the margin of safety in units assuming the procedure is performed 200 times?

A) 200 units

B) 130 units

C) 140 units

D) 160 units

E) 20 units

 

28) What is the margin of safety assuming 100 procedures are performed?

A) $16,000 or 40 times

B) $20,000 or 50 times

C) $24,000 or 60 times

D) $40,000 or 100 times

E) $50,000 or 110 times

29) Lobster Liquidators will make $500,000 if the fishing season weather is good, $200,000 if the weather is fair, and would actually lose $50,000 if the weather is poor during the season. If the weather service gives a 40% probability of good weather, a 25% probability of fair weather, and a 35% probability of poor weather, what is the expected monetary value for Lobster Liquidators?

A) $500,000

B) $750,000

C) $267,500

D) $200,000

E) $232,500

 

Answer the following question(s) using the information below.

 

Southwestern College is planning to hold a fund raising banquet at one of the local country clubs. It has two options for the banquet:

 

OPTION 1:Crestview Country Club

a. Fixed rental cost of $1,000

b. $12 per person for food

 

OPTION 2:Tallgrass Country Club

a. Fixed rental cost of $3,000

b. A caterer who charges $8.00 per person for food

 

Southwestern College has budgeted $1,800 for administrative and marketing expenses. It plans to hire a band which will cost another $800. Tickets are expected to be $30 per person. Local business supporters will donate any other items required for the event.

 

30) Which option provides the least amount of risk?

A) Option one

B) Option two

C) Both options provide the same amount of risk.

D) Neither option has risks.

E) Without probability assignments it is not possible to determine the riskier option.