Kenneth Brown is facing three alternatives with two possible outcomes—a favorable or an unfavorable market—for those alternatives. In four pages (not including reference and title page) describe and justify the decision making steps Brown may perform in his case. Be sure to provide research to support your ideas. Use APA style in-text cite, and cite and reference your sources to avoid plagiarism. Provide any formulas used.
Kenneth Brown is the principal owner of Brown Oil, Inc. After quitting his university teaching job, Ken has been able to increase his annual salary by a factor of over 100. At the present time, Ken is forced to consider purchasing some more equipment for Brown Oil because of competition. His alternatives are shown in the following table:
Equipment FAVORABLE UNFAVORABLE
SUB 100 $300,000 -200, 000
OLIER J $250,000 -100,000
TEXAN $75,000 -18,000
For example, if Ken purchases a Sub 100 and if there is a favorable market, he will realize a profit of $300,000. On the other hand, if the market is unfavorable, Ken will suffer a loss of $200,000. But Ken has always been a very optimistic decision maker.
(a) What type of decision is Ken facing?
(b) What decision criterion should he use?
(c) What alternative is best?
should stockholder wealth maximization be thought of as a long term goal or a short term goal ? For example, if one action would probably increase the firm's stock price ...May 23 2020
The production process of the firm you manage uses labor and capital. How does the long-run expansion path change when the wage increases while the rental rate of capital...May 11 2020
Managing across Cultures • Below are the instructions for your assignment, which is due for submission via TurnItIn on Thursday, 22 May 2014 (23.59 hrs). Please envision ...May 14 2020
EXERCISE 11–1 Compute the Return on Investment (ROI) [LO1]Tundra Services Company, a division of a major oil company, provides various services to the operators of the No...Jun 28 2020
Discuss the political incentives that helped motivate federal politicians to approve budget deficits in all but four years between 1960 and 2012.6. Explain: “Politicians...Dec 05 2019
In an SQL statement, which of the following parts states the conditions for row selection? (a) Select (b) From (c) Order By (d) Group By (e) WhereDec 28 2017
A cylindrical specimen of some metal alloy 8 mm in diameter is stressed in tension. A force of 12,000 N produces an elastic reduction in specimen diameter of 4.5X10-3 mm...Jun 15 2020
Why are the direct interaction and surrogate interaction regions in a PCN diagram important in service design? >Jul 24 2020
Problem: Develop a class encapsulating the concept of a college course, assuming that a course has following attributers: code (for instance COSC1337), a description, an...Apr 07 2020
Assume that a grandfather clock was sold for $13,000 cash plus 5 percent sales tax The clock had originally cost Heines $9,000 Assume Heines uses a perpetual inventory sy...Mar 24 2020