User Account

All Pages

How does the given probability change sims decision

Assignment Help Accounting Basics
Reference no: EM131551877

Assignment

After buying a computer system, Sim Thomas must decide whether to purchase (1) a complete maintenance (or service) policy at a cost of $500, which would cover all maintenance costs; (2) a partial maintenance policy at a cost of $300, which would cover some of the costs of maintenance; or (3) no maintenance policy. The consequences, costs and probabilities are given in the following table:

MAINTENANCE

REQUIRED NOT REQUIRED

No Service Agreement $3,000 $0

Partial Service Agreement $1,500 $300

Complete Service Agreement $500 $500

Probabilities 0.2 0.8

(a) What do you recommend?

(b) If the probability of needing maintenance is 0.8 (instead of 0.2) and the probability of not needing maintenance is 0.2, how does this change Sim's decision?

Reference no: EM131551877

Questions Cloud

Review the major forces that have promoted the growth : Review the major forces that have promoted the growth in popularity of direct marketing. Can you come up with any reasons why its popularity might be peaking
Describe traditional cost allocation : Describe traditional cost allocation. Discuss costing terminology (direct costs and indirect costs) and cost drivers. Identify the steps in ABC.
Which company would you recommend as an investment : Which company would you recommend as an investment? Discuss the items that were considered in your decision.
Evaluate the evolution of online marketing : Evaluate the evolution of online marketing, making references to lessons from traditional marketing theory.
How does the given probability change sims decision : If the probability of needing maintenance is 0.8 (instead of 0.2) and the probability of not needing maintenance is 0.2, how does this change Sim's decision?
What you will do to change the challenges into strengths : Conduct a self-analysis about whether you would make a good leader - Discuss what you will do to change the challenges into strengths.
What constitutes replication in your plan : Consider a situation where fatigue life testing of steel bar stock is to be done. Bar stock can be ordered from several different vendors and it can be ordered.
Journal entries to record the transactions that occurred : Journal entries to record the transactions that occurred during the month of December. Prepare an unadjusted trial balance.
What is the motivation for violating the generally accepted : What is the motivation for violating the generally accepted accounting principle of matching revenues and expenses? What is the result of committing this fraud?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd