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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.

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Answer:

Option (D) is correct.

Explanation:

Given that,

In 2016,

Allowance for doubtful accounts = $7.2 million

Total accounts and other receivables, net = $486.6 million

In 2015,

Allowance for doubtful accounts = $9.3 million

Total accounts and other receivables, net = $520.2 million

Therefore,

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= $486.6 + $7.2

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8 0
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The demand for wooden pencils is very responsive to a change in price. That is, the demand for these pencils is highly elastic.
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Answer:

D. Price will rise, quantity purchased will fall, and gross revenues will fall.

Explanation:

It will lead to a higher price of the good as the management has to take into consideration the amount to wages to be paid to the workers, thus increasing the price of the goods. This will result to a lower demand at a higher price  because the price increases and competitions will take advantage of the situation and that will also reduce the revenue of the firm.

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2 years ago
Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in
lesya692 [45]

Answer:

Federal tax = $10,856.25

Explanation:

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Computation:

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4 0
2 years ago
The longer the time period considered the more the elasticity of supply tends to
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The longer the time period considered, the more the elasticity of supply tends to INCREASE.
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Apex Corp. asks its consumers to determine how they perceive the similarities and dissimilarities among relevant product attribu
8_murik_8 [283]

Answer: (C) Perceptual mapping

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The perceptual mapping is one of the type of technique that is used by the marketers for visually displaying the different types of perceptions of the consumers and the users.

It is also known as the market mapping technique that is used for the developing the various types of brands and the products in the market for based on the customer perspective.  

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