A group of investors wants to open up a jewelry store in a new shopping center. The investors are trying to decide whether to stock the store with expensive jewelry, medium-priced jewelry, or inexpensive jewelry. The probability of their choice depends upon the economic conditions. The payoff table below gives the anticipated monthly profits (in $) for different states of the economy. The probability of prosperity is 0.4.

Decision Alternative	States of Nature
Prosperity	Recession
Expensive	19,000	4,000
Medium	11,000	3,000
Inexpensive	4,000	10,000

(a)Determine the expected value (in $) of each alternative.

EV(Expensive)=$

EV(Medium)=$

EV(Inexpensive)=$

Indicate which decision alternative is the best: Expensive, Medium or Inexpensive

(b)Determine the expected value with perfect information (in $) about the states of nature.$

(c)Determine the expected value of perfect information (in $).