1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Norma-Jean [14]
3 years ago
5

Chris Suit is administrator for Lowell Hospital. She is trying to determine whether to build a large wing on the existing hospit

al, a small wing, or no wing at all. If the population of Lowell continues to grow, a large wing could return $150,000 to the hospital each year. If a small wing were built, it would return $100,000 to the hospital each year if the population continues to grow. If the population of Lowell remains the same, the hospital would encounter a loss of $85,000 with a large wing and a loss of $45,000 with a small wing. Unfortunately, Suit does not have any information about the future population of Lowell.
Business
1 answer:
nalin [4]3 years ago
5 0

Answer:

A) Expected monetary value (EMV) is how much money you should expect to receive from different options. The EMV of both options are:

  • EMV large wing = (50% x $150,000) - (50% x $85,000) = $75,000 - $42,500 = $32,500
  • EMV small wing = (50% x $100,000) - (50% x $45,000) = $50,000 - $22,500 = $27,500

Since the EMV of the large wing is higher, then the large wing is the best alternative.

B) If the likelihood of the population growing reduces to 40% and the likelihood that it will remain unchanged increases to 60%, then the new EMVs for both options are:

  • EMV large wing = (40% x $150,000) - (60% x $85,000) = $60,000 - $51,000 = $9,000
  • EMV small wing = (40% x $100,000) - (60% x $45,000) = $40,000 - $27,000 = $13,000

Now the EMV of the small wing is higher, then the small wing is the best alternative.

C) EVPI is the expected value of perfect information, that means how much you are willing to pay to get the information you need to avoid any possible loss or increase your gains.

EVPI = EVwPi - highest EMV

EVwPi = (highest possible outcome of situation 1 x probability of situation 1) + (highest possible outcome of situation 2 x probability of situation 2)

  • situation 1 is the wing being built, and the highest possible outcome is $150,000 when the population grows.
  • situation 2 is not building anything at all, and the highest possible outcome is $0 when the population doesn't grow.

EVwPi = ($150,000 x 40%) + ($0 x 60%) = $60,000

EVPI = $60,000 - $13,000 = $47,000

This means that Chris would be willing to pay a maximum of $47,000 to know the perfect information about what investments should be carried out by the hospital.

You might be interested in
Cost behavior refers to the methods used to estimate costs for use in managerial decision making. True False
bazaltina [42]

Answer:

True

Explanation:

It's A.A because it makes more sense then b Falsehood

8 0
2 years ago
The method by which consumers acquire products and services
Mariulka [41]
Retailing. The method by which consumers acquire products and services.
Distribution Channel. The chain of businesses through which a good or service passes until it reaches the end consumer.
Manufacturer. Produces the products.
Wholesaler. ...
Retailer. ...
Closeout stores. ...
Convenience Stores. ...
Department stores.
7 0
3 years ago
If a manager is concerned about doing the work with the least cost and waste possible, then his or her primary managerial concer
marishachu [46]

If a manager is concerned about doing the work with the least cost and waste possible, then his or her primary managerial concern is effectiveness.

<h3>Management Functioning</h3>
  • A manager is somebody who can lead, direct and control tasks and individuals in their association without forcing their position.
  • In reality as we know it where a more casual working design is turning out to be progressively famous, a director needs to work with their group to accomplish bigger objectives.
  • Elements of the board are an extraordinary beginning stage to find your balance before you jump straight into your job as a manager.
  • Elements of the board assist you with remaining informed about what you want to do and in what way that you can direct your staff in like manner.
  • The board specialists like Fayol and Gulick clarify the elements of the executives for furnish yourself with the right abilities to turn into a cultivated administrator.

To learn more about Management functioning refer to:

brainly.com/question/15351742

5 0
2 years ago
The marginal external cost associated with air pollution increases with the annual output of a polluting industry. At the curren
Georgia [21]

Answer:

The answer is "Option c".

Explanation:

The Marginal external cost, owing only to the production of an extra unit of goods or services, is the cost changes for persons besides the producer or buyer of goods or services. In this, question the  "option c" is right in, this regard because it needs a correction tax of less than $10 per unit of production.

3 0
3 years ago
How do I speak The language of Ayapaneco because I need it to communicate with my fish so i can teach them how to swim
soldier1979 [14.2K]

Explanation:

!-"-$-$+(_(_(_+_++_+_+_+_+_++_+_+_+_+

5 0
3 years ago
Read 2 more answers
Other questions:
  • Quinton wants you to calculate his biweekly paycheck. How much would he earn each pay period if he has an annual salary of $55,5
    6·1 answer
  • Mercedes-Benz has a self-driving car capable of 80 miles-per-hour speed. You have to keep your hands on the wheel in this E-clas
    15·1 answer
  • Which of the following is a correct statement? Multiple Choice Writing off an uncollectible account under the allowance method d
    10·1 answer
  • Mr. James purchased a vacation house in Los Angeles on July 1, 2017. The purchase price was $1,000,000, and Mr. James spent $10,
    12·1 answer
  • A _____ refers to a control system combining four sets of performance measures: financial, customer, business process, and learn
    14·1 answer
  • What will happen in a market where a binding price floor is removed? Group of answer choices The price or quantity of the produc
    13·1 answer
  • Why is it important to add images charts and graphs into reports? what is important to illustrate reports with visuals?
    6·2 answers
  • Finish this sentence... I believe car loans are
    5·1 answer
  • Alex sees that his neighbors' lawns all need mowing. He offers to provide the service in exchange for a wage of $20 per hour. So
    15·1 answer
  • Discrimination lawsuits that go to court are very expensive, averaging over $200,000, so a well-crafted ________ can save an emp
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!