Question
A local real estate investor in Orlando is considering five alternative investments: a day spa, a theater, a restaurant, a motel, or a gift shop.
A local real estate investor in Orlando is considering five alternative investments: a day spa, a theater, a restaurant, a motel, or a gift shop. Profits from the day spa, theater, gift shop or restaurant will be affected by the cost of gasoline; profits from the restaurant will be relatively stable under any condition. The following payoff table shows the profit or loss that could result from each investment. Determine the best investment using the minimax regret decision criterion.
Gasoline Prices |
Investment Decisions | Increase .30 | Stable .60 | Decrease .10 |
Day Spa | $-3,000 | $14,000 | $19,000 |
Gift Shop | $-8,000 | $15,000 | $20,000 |
Motel | $7,000 | $8,000 | $10,000 |
Restaurant | $6,000 | $6,000 | $6,000 |
Theater | $-6,000 | $22,000 | $18,000 |
Group of answer choices
Restaurant
Day Spa
Gift Shop
Theater
Motel
Next
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