Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a clothing company is evaluating two possible loca

A clothing company is evaluating two possible locations for a new retail store. The...

60.1K

Verified Solution

Question

Accounting

A clothing company is evaluating two possible locations for a new retail
store. The company's research indicates that Location A has a 45%
probability of generating $400,000 in cash flow, and a 55% probability
of generating $325,000 in cash flow. Location B has a 25% probability
of generating $600,000 in cash flow, and a 75% probability of
generating $250,000 in cash flow. Based on the expected value for
each location, the company should choose Location:
*Source: Retired ICMA CMA Exam Questions.
A
A, because its expected value is $21,250 higher than Location B.
B
A, because its expected value is $75,000 higher than Location B.
C
B, because its expected value is $125,000 higher than Location
A.
D
B, because its expected value is $8,750 higher than Location A.
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Joker stock has a sustainable growth rate of 9 percent, ROE of 15 percent, and dividends...

Finance
Q

The coefficient of friction between the block of mass m1 = 3.00 kg and the surface...

Physics
Q

Suppose that you know several women who earn lower salaries than comparable men in the same...

Psychology
Q

A device consists of 8 balls with mass .6kg attached to the ends of low mass...

Physics
Q

As auditors (or in any field) we should remain informed about current trends and issues relating...

Accounting
Q

An explanation of one area of enterprise risk management (4-5) sentences.

Accounting
Q

b 8a b 14ab 4ab 2ab

Basic Math
Q

Automatic transmissions and manual transmissions achieve the same goal: They use power to turn the...

Basic Math
Q

The probabilities of events E, F, and E?F are given below. Find (a) P(EIF), (b)...

Basic Math
Q

The comparative balance sheets presented below (in simplified form) are available for Simple Company. During...

Accounting
Q

how much is the inventory turnover for six flags corporation?

Accounting
Q

On January 4, 2021, Runyan Bakery paid $356 million for 10 million shares of Lavery...

Accounting