Page Litton likes to use her credit card to buy gas since she can defer payment for 30 days. However, she notices that her dealer charges 3 cents more per gallon than if she paid with cash. Page estimates paying about $1
00 a gallon for gas, and her monthly credit statement shows an APR of 18 %. Given this information, Page should
A)
continue using her card since the opportunity cost of paying in cash is less than 18% a year.
B)
pay with cash since its opportunity cost is about 36% a year.
C)
continue using her card, the effective cost of using cash is about 36% a year.
D)
you can't tell unless you know how much gas she will buy.
B
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Indicate whether the statement is true or false
Decision trees:
A) give more accurate solutions than decision tables. B) give less accurate solutions than decision tables. C) are especially powerful when a sequence of decisions must be made. D) are rarely used because one needs specialized software to graph them. E) are too complex to be used by decision makers.