Figure 4.1

-A manager weighs three options for capacity cushion as depicted in Figure 4.1. If the dollar amounts expressed in the figure are cash flows, what is the value of the optimal decision?
A) $11,700
B) $11,500
C) $12,300
D) $10,500

Question

Figure 4.1
 
-A manager weighs three options for capacity cushion as depicted in Figure 4.1. If the dollar amounts expressed in the figure are cash flows, what is the value of the optimal decision?
A) $11,700 
B) $11,500 
C) $12,300 
D) $10,500

Quizplus · Accepted Answer

The optimal decision is to choose the capacity cushion of 10%, which has a value of $11,700.

Figure 4.1 -A Manager Weighs Three Options for Capacity Cushion as Depicted