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1. RAJAH COMPANY IS GOING TO INTRODUCE ONE OF THE THREE NEW PRODUCTS. A,B AND C OR DO NOTHING AS THE MARKET CONDITION, (FAVOURABLE, STABLE
1. RAJAH COMPANY IS GOING TO INTRODUCE ONE OF THE THREE NEW PRODUCTS. A,B AND C OR DO NOTHING AS THE MARKET CONDITION, (FAVOURABLE, STABLE OR UNFAVOURABLE) AFFECT THE PAY OFF OF THE PRODUCTS, THE COMPANY ESTIMATES THE FOLLOWING PAY OFF AND PROBABILIES
product | favourable | stable | un-favourable | |||
a | 8,000 | 6,000 | -5,000 | |||
b | 5000 | 3,000 | -1,200 | |||
c | 7000 | 6,000 | -1,000 | |||
do nothing | 0 | 0 | 0 | |||
probabilities | 0.4 | 0.3 | 0.3 | |||
a) what is the decision under risk
b) what is the expected value of perfect information
please explain step by step (cheg)
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