KSB is considering a project that will require $39,000 in net working capital and $68,000 in fixed assets. The project is expect
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""The Athletic Department of Leland University is considering whether to hold an extensive campaign next year to raise funds for a new athletic field. The response to the campaigın depends heavily upon the success of the football team this fall. In the past, the football team has had winning seasons 60 percent of the time. If the football team has a winning season (W) this fall, then many of the alumnae and alumni will contribute and the cam- paign will raise $3 milion. If the team has a losing season (L), few will contribute and the campaign will lose $2 million. If no campaign is undertaken, no costs are incurred. On September 1, just before the football season begins, the Athletic Department needs to make its decision about whether to hold the campaign next year.
(a) Develop a decision analysis formulation of this problem by identifying the alternative actions, the states of nature, and the payoff table.
(b) According to Bayes’ decision rule, should the campaign be undertaken?
(c) What is EVPI? "
is explained in the attachment.
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