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k0ka [10]
3 years ago
5

Kris is considering taking her poutine food truck to the local wine festival to vend. She is pondering the amount of food to sto

ck. High demand Average demand Low demand Large stocka) Given the payoff matrix, what is her decision under maximax?b) Given the payoff matrix, what is her decision under maximin?c) Given the payoff matrix, what is her decision under equally likely?d) The probability of high demand is 0.3, medium demand 0.5, and 0.2 for low demand. If she is rational and risk-neutral, which alternative should she select, given the payoffs below?e) What is the EVPI? High demand Average demand Low demandLarge Stock $22,000 $12,000 -$2,000Medium Stock $14,000 $10,000 $6,000Small Stock $9,000 $8,000 $4,000
Business
1 answer:
marta [7]3 years ago
6 0

Answer:

A.

Under the MaxiMax criteria, the best of the maximum payoffs of all the alternatives will be selected.

Maximum payoff under large stock = $22000

Maximum payoff under medium stock = $14000

Maximum payoff under small stock = $9000

The , best of above payoff is $22000, so large stock alternative will be selected.

B.

Under the MaxiMin criteria, the best of the minimum payoffs of all the alternatives will be selected.

Minimum payoff under large stock = -$2000

Minimum payoff under medium stock =$6000

Minimum payoff under small stock =$4000

The , best of the above payoffs is $6000, so medium stock alternative will be selected.

C.

Under equally likely criteria,

Expected payoff under the large stock = (22000 + 12000 -2000)/3 = $10666.67

Expected payoff under the medium stock = (14000 + 10000+6000)/3 = $10000

Expected payoff under the small stock = (9000+8000+4000)/3 = $7000

The maximum payoff is with the large stock alternative, then large stock alternative is selected.

D.

With the given probabilities,

Expected payoff under the large stock = (.3*22000 + .5*12000 -.2*2000) = $12200

Expected payoff under the medium stock = (.3*14000 + .5*10000+ .2*6000) = $10400

Expected payoff under the small stock = (.3*9000 + .5*8000 + .2*4000) = $7500

The maximum payoff is with the large stock alternative, then large stock alternative is selected.

E.

EVPI = EVWPI - EVWOPI

EVPI = (.3*22000 + .5*12000 + .2*6000) - 12200

EVPI = $1600

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Homeowners insurance covers loss of a home caused by which of the following two factors? fire inability of owner to pay mortgage
dybincka [34]

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fire & natural distaster.

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Spree Company sold $769,300 of goods during the year at a cost of goods sold of $548,600. Inventory was $31,283 at the beginning
Zarrin [17]

Answer:

16.42

Explanation:

Data provided in the question:

Cost of goods sold =  $548,600

Beginning inventory of the year = $31,283

Ending inventory of the year = $35,538

Now,

the Inventory turnover ratio is calculated as;

⇒ ( Cost of goods sold ) ÷ ( Average inventory of the year )

Also,

Average inventory of the year = \frac{\textup{Beginning inventory + Ending inventory}}{\textup{2}}

= \frac{\$31,283+\$35,538}{\textup{2}}

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Therefore,

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6 0
3 years ago
A class of stock for which there is no minimum legal capital is called?
Ann [662]
The answer would be D noncumulative stock.
6 0
3 years ago
Suppose a technological improvement has lowered the cost of manufacturing cell phone batteries. This would lead to ___________ (
Julli [10]

Answer:

The correct answer is: an increase; fall; substitutes; decrease; complements; increase.

Explanation:

Technological improvement has lowered the cost of producing cell phone batteries. This reduction in the cost of production will cause the price of cell phone batteries to decline. Since batteries are used as inputs in the cell phone. The reduction in the price of inputs means that the cost of production would decrease. The firms will be able to supply more at the same cost. The supply, as a result, will increase. The supply curve will shift to the right. The price of cell phones will decline.

Cell phones and landlines are substitutes. They can be used in place of each other. A decrease in the price of cell phones would cause the demand for landlines to decrease as the consumers will prefer a cheaper substitute.

The cell phones and applications, however, are use complements. They are used together. So when the price of cell phones decrease and its demand increase, the demand for cell phone applications will increase as well.

6 0
3 years ago
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