Fact Pattern: The probabilities shown in the table below represent the estimate of sales for a new product.
Sales (Units)
Probability
0-200
15%
201-400
45%
401-600
25%
601-800
15%
Question: 1 What is the probability of selling between 201 and 600 units of the product?
A. 0%
B. 11.25...
ACCT 3300 Ch 9(3) Questions with Correct Answers
Fact Pattern: The probabilities shown in the table below represent the
estimate of sales for a new product.
Sales (Units)
Probability
0-200
15%
201-400
45%
401-600
25%
601-800
15%
Question: 1 What is the probability of selling between 201 and 600 units
of the product?
A. 0%
B. 11.25%
C. 70%
D. 25% Correct Answer-C. 70%
Fact Pattern: The probabilities shown in the table below represent the
estimate of sales for a new product.
Sales (Units)
Question: 2 What is the best estimate of the expected sales of the new
product?
A. 480
B. 380
C. 400
D. 800 Correct Answer-B. 380
In decision making under conditions of uncertainty, expected value
refers to the
A. Likely outcome of a proposed action.
B. Present value of alternative actions.
C. Probability of a given outcome from a proposed action.
D. Weighted average of probable outcomes of an action. Correct
Answer-D. Weighted average of probable outcomes of an action.
,Fact Pattern: A beverage stand can sell either soft drinks or coffee on
any given day. If the stand sells soft drinks and the weather is hot, it will
make $2,500; if the weather is cold, the profit will be $1,000. If the
stand sells coffee and the weather is hot, it will make $1,900; if the
weather is cold, the profit will be $2,000. The probability of cold
weather on a given day at this time is 60%.
Question: 4 If the probability of hot weather, given a hot weather
forecast, is 50%, how much would the vendor be willing to pay for the
forecast?
A. $600
B. $300
C. $1,000
D. $500 Correct Answer-B. $300
Fact Pattern: Butler and Burnside are projecting market conditions for
the upcoming month. They have prepared the following payoff table:
Demand in Units
0
2
4
6
Probability of Demand
Supply
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