Hi,
The goal of a theory is <u>to explain natural and physical </u><u>phenomena.</u>
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(Answered by Benjemin)
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He reorganized life into five kingdoms
Question:
The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows:
Alternative Precipitation
Low Normal High
Do nothing -100 100 300
Expand 350 500 200
Build new 750 300 0
If he feels the chances of low, normal, and high precipitation are 30 percent, 20 percent, and 50 percent respectively, What is EVPI (Expected value of Perfect Information)?
A. $140,000
B. $170,000
C. $285,000
D. $305,000
E. $475,000
Answer:
D. $170,000
Explanation:
The expected long run profits are for
Low Normal High
Do nothing -100*0.3 100*0.2 300*0.5 = 140
Expand 350*0.3 500*0.2 200*0.5 = 305
Build new 750*0.3 300*0.2 0*0.5 = 285
Therefore the expected long run profits are
$140,000
$305,000
$285,000
Based on his selected option being either to build new or to expand, the most profitable option is to expand
=$305,000
EVPI = EPPI-EMV =$170,000
Explanation:
It is based upon the fact that " The light travels faster then sound." As the speed of light is faster then the speed of sound, light travels 300,000 km per second and sound travels 1192 km per hour. That is why we observe the lightening first and hear the the sound of thunder later.
You can do this experiment by yourself. Once you see the lightening start counting the seconds until you hear the sound of thunder.Then divide the seconds by 5, you will find out how many miles away the lightening strike was.
