What is at the core of positive decision-making

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Chapter 

The table below contains the Return on Assets (ROA) and the growth in sales for two publicly traded hospitality firms - one restaurant and the other a hotel.  Compute the mean and standard deviation of the ROA and sales growth.  Based on the volatility of the returns and growth rate, identify which of the firms is the hotel and which one is the restaurant. Justify your choice.

Date

Firm A

 

Firm B

 

 

ROA

Sales Growth

 

ROA

Sales Growth

12/31/2019

5%

1%

 

13%

0%

12/31/2018

8%

-9%             

 

18%

-8%

12/31/2017

6%

34%

 

15%

-7%

12/31/2016

3%

18%

 

15%

-3%

12/31/2015

14%

5%

 

12%

-7%

12/31/2014

11%

8%

 

14%

-2%

12/31/2013

9%

8%

 

15%

2%

12/28/2012

9%

-4%

 

15%

2%

12/30/2011

3%

5%

 

17%

12%

12/31/2010

5%

7%

 

15%

6%

Chapter 8 Review Questions

  1. What is at the core of positive decision-making?
  2. Describe the normative and positive decision-making paradigms.
  3. Describe what it means by saying "rank rationally" for possible outcomes.
  4. Describe the difference between risk and uncertainty.

Reference no: EM133068270

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