13 In the environment of increased competition, a fitness club executive is considering the purchase of additional
Question:
13 In the environment of increased competition, a fitness club executive is considering the purchase of additional equipment. His alternatives, outcomes, and payoffs (profits) are shown in the following table:
EQUIPMENT FAVORABLE MARKET UNFAVORABLE MARKET Acme $400,000 - +175,000 Standard $280,000 - + 90,000 High Pro $ 95,000 - + 15,000
(a) If the executive is an optimistic decision maker, which alternative will he likely choose?
(b) If the executive is a pessimistic decision maker, which alternative will he likely choose?
(c) Market research suggests the chance of a favorable market for fitness clubs is 76%. If the executive uses this analysis, which alternative will he likely choose?
Step by Step Answer:
Managerial Decision Modeling With Spreadsheets
ISBN: 9781292024196
3rd Edition
Authors: Barry Render