Intermediate. The committee of a new golf club is setting the annual membership fee: The number of members depends on the membership fee charged and economic conditions. The forecast annual cash inflows from membership fees are shown below:

(i) If the maximin criterion is applied the fee set by the committee would be:

(a) $600

(b) $800 (ec) $900

(d) $1000 (ii) If the minimax regret criterion is applied the fee set by the committee would be:

(a) $600

(b) $800

(c) $900

(d) $1000 (4 marks)
CIMA P1 Performance Operations

Transcribed Image Text:

Membership level Membership fee Low Average High $000 $000 $000 $600 360 480 540 $800 400 440 480 $900 360 405 495 $1000 320 380 420