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(Solved): The following payoff table shows profit in units of millions for a decision problem involvingwhether ...
The following payoff table shows profit in units of millions for a decision problem involving
whether to build an industrial complex on a tract of land, or to sell the land, depending on
whether the demand for the complex is high (S1), or low (S2)
a. Calculate the EV with PI. Assume the probability of S1 is 0.6. Show your work or no credit.
b. Calculate the EV of PI. You should use the result for EV without PI given in the HW 11 solutions if
your solution differed. Show your work or no credit.
\begin{tabular}{l|l|l|} \hline & \begin{tabular}{l} Build \\ Complex \end{tabular} & Sell \\ \hline S1 & 3000 & 2000 \\ \hline S2 & 1000 & 2000 \\ \hline \end{tabular}