A market research survey is available for $10,000. Using a decision tree analysis, it is found that the expected monetary value

Question

3 years ago

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A market research survey is available for $10,000. Using a decision tree analysis, it is found that the expected monetary value

with the survey is $65,000. The expected monetary value with no survey is $62,000. What is the expected value of the information from this sample?

Business

1 answer:

svet-max [94.6K] · Answer 1 · 2022-06-08T19:36:03+03:00

Answer:

Therefore Expected Value of the information = $65,000+$62,000 - $10,000 = $117,000

Explanation:

If the market research survey is available for $10,000.

Using a decision tree analysis, it has been found that the expected monetary value with the survey is $65,000. The expected monetary value with no survey is $62,000.

<u>Then the expected value of the information from this sample is the expected value of each outcome and deducting the costs associated with the decision</u>

Therefore Expected Value of the information = $65,000+$62,000 - $10,000 = $117,000