Classical decision-making theory presumes that managers make purely rational choices. Which of the following represents an underlying assumption of the Rational Decision-Making Model?
I. The problem is clear and unambiguous.
II. Preferences are well-defined, consistent, and stable.
III. The final selected alternative will maximize the economic payoff.

The Rational Decision-Making Model assumes that decision-makers possess complete information and follow a logical, step-by-step process to select the optimal solution. Key Assumptions of the Rational Model: Clear and Unambiguous Problem: The decision-maker has complete information regarding the problem and can define it without ambiguity. Clear and Consistent Preferences: All decision criteria and alternatives can be ranked in order of priority, and these preferences remain constant over time. Known Options & Consequences: The decision-maker is aware of all possible alternatives and their potential outcomes. No Time or Cost Constraints: The process operates without deadline pressure or resource limitations. Maximum Payoff: The ultimate choice selected will yield the maximum economic value or optimal utility.