The owner of a small business is considering three options: buying a computer, leasing a computer, or getting along without a computer. Based on the information obtained from the firm's accountant, the following payoff table (in terms of net. profit) was developed: State of Nature State #1 State # 2 State # 3 Alternative (S1) (S2) (S3) A1 4 6. A2 7. A3 3. Based on the probability for each state of nature in previous question(the probability for $1 to happen equals the probability of S2; the probability for S2 to happen is three times of S3). What is the EVPI?
The owner of a small business is considering three options: buying a computer, leasing a computer, or getting along without a computer. Based on the information obtained from the firm's accountant, the following payoff table (in terms of net. profit) was developed: State of Nature State #1 State # 2 State # 3 Alternative (S1) (S2) (S3) A1 4 6. A2 7. A3 3. Based on the probability for each state of nature in previous question(the probability for $1 to happen equals the probability of S2; the probability for S2 to happen is three times of S3). What is the EVPI?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:The owner of a small business is considering three options: buying a computer,
leasing a computer, or getting along without a computer. Based on the information
obtained from the firm's accountant, the following payoff table (in terms of net.
profit) was developed:
State of Nature
State # 1
State # 2
State # 3
Alternative
(S1)
(S2)
(S3)
A1
6.
A2
АЗ
4
Based on the probability for each state of nature in previous question(the
probability for S1 to happen equals the probability of S2; the probability for S2 to
happen is three times of S3). What is the EVPI?
O 5.29
O Can't be computed with the given information
O 114
O 642
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