1.You work for a Major League Baseball team's development system. You and your colleagues are trying to decide between promoting two pitchers in the minor league system. Your organization drafted Pitcher A at the 20^th overall pick and invested $3,120,000 as a signing bonus plus training, salary, and time totaling another $130,0000. They drafted Pitcher B as the 632^nd and invested $80,000 in signing bonus and $100,000 in training, salary, and time. Both pitchers fill the same role in the team. The player development team is split about which pitcher to promote. Some believe Pitcher B should be promoted because he has higher predicted performance based on his development so far. However, others believe that Pitcher A should be promoted since the organization has invested so much in him already, and he was the best athlete with the most potential when he was drafted. They point out that if he is given the opportunity to play at higher levels, he might reach his potential as one of the best players ever.

a.What decision making principles would you use to make this decision? Please pick from Profit-maximization, Opportunity cost, Return on investment, Risk, Time value of money

Sunk costsExplain how they apply to the situation.

b.What data do you need to decide and to convince your colleagues? Explain why the data is needed.

c. Are there any preferences that should be accounted for in this situation?

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