A manufacturing company is considering one of the three possible locations (new South Wales, Victoria and Queensland) to establish its new factory. The company has put together the following payoff table of profits in millions of dollars, for the life time of the factory under three possibilities for the world economy:

AutoSave O Off) Search Neha Arora X Class Test 2 - Monday - Saved to this PC . File Home Insert Draw Design Layout References Mailings Review View Help Grammarly Table Design Layout Share Comments Cover Page Shapes SmartArt @ Link a Get Add-ins W Header A TI Equation Blank Page Icons Chart Bookmark _ Footer * 2 Symbol Table Pictures Reuse Page Break 3D Models ~ Screenshot My Add-ins Wikipedia Online Comment Text Files Videos Cross-reference Page Number Box Pages Tables Illustrations Reuse Files Add-ins Media Links Comments Header & Footer Text Symbols Question 1 (4 + 2 = 6 marks) A manufacturing company is considering one of the three possible locations (new South Wales, Victoria and Queensland) to establish its new factory. The company has put together the following payoff table of profits in millions of dollars, for the life time of the factory under three possibilities for the world economy: NSW VIC QLD Strong Economy $6 $8 $3 Moderate Economy $8 $6 $5 Weak Economy $3 $7 $8 After consulting an economist, you have determined the following probabilities: Strong Economy Moderate Economy Weak Economy Probability 0.3 0.5 0.2 a) Calculate the expected monetary value (EMV) for each possible decision. Which location would you select to maximise the expected monetary value? Page 3 of 7 1077 words DX English (United States) [ Focus + 100% 8:19 AM Type here to search O W (C 28 C ~ ()) 6 2 ENG 6/09/2021