Crenshaw Investments uses three factors to evaluate the attractiveness of an investment alternative.The three factors carry different weights.Suppose the company wants a weighting scheme that will make Factor A twice as important as Factor B and five times as important as Factor C.What weights should it use?
A)A: 20, B: 5, C: 1.
B)A: 5, B: 10, C: 2.
C)A: 2, B: 5, C: 10.
D)A: 10, B: 5, C: 2.
E)A: 3, B: 5, C: 10.

Question

Quizplus · Accepted Answer

To make Factor A twice as important as Factor B and five times as important as Factor C, we can set the weights relative to each other. Let's denote the weight of Factor C as x. Then, the weight of Factor A would be 5x (five times as important as C), and the weight of Factor B would be 2.5x (half as important as A, or twice as important as C). To find a common set of weights that are whole numbers, we can choose x = 2, making the weights for A, B, and C 10, 5, and 2, respectively, which matches option D.

Crenshaw Investments Uses Three Factors to Evaluate the Attractiveness of an Investment