Answer:
b. A manager should assess the risk of the project.
Explanation:
While making a capital investment decision, a firm shall properly evaluate the capital investments , for this the manager shall access the following:
- Required return on investment by the firm.
- Risk associated with the project.
- Cash flows arising from the investment.
- Timing of the cash flows for discounting them into present value.
- Cost associated with the project.
Therefore, correct option is :
b. A manager should assess the risk of the project.
Answer:
Payoff Matrix:
Max
Install Don't Install
Jackson - Install $310 $310 , $840
Not Install $840, $310 $0 , $0
Explanation:
If the device is not installed the payoff is $840 and if the device is installed the pay off is $310. This is calculated by deducting the cost of control device from the decrease in cost of the health care service which is $840 - $530 = $310.
Answer:
b. Computers: Increase / Rice: Decrease
Explanation:
Opportunity cost refers to the benefits foregone of non chosen option when an option is chosen out of all available options which includes the non chosen option.
At full employment level, resources are employed in the most efficient manner, then to increase the production of one good, certain resources need to be diverted which were earlier used in the production of other goods (assuming the country produces only 2 goods).
Thus, if technology progresses only in the production of one good, that would imply that now the production of such a good would be encouraged.
Hence, the opportunity cost of computers would increase whereas that of producing rise would decrease.
