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Bubbly Business Caf is trying to decide should they open a second location, hire more people, or upgrade machines. Depending on increases in tuition or

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image text in transcribed Bubbly Business Caf is trying to decide should they open a second location, hire more people, or upgrade machines. Depending on increases in tuition or not, they would have different payoffs. There is 25% chance that tuition will increase. The payoff table is as follows. Probability 0.25 0.75 Tuition Tuition Increase Same Open 2nd location Hire more people Upgrade machines -$5 $3 $1 $7 $0 $4 Seeing how the Bubbly Business Caf was struggling to make a decision, Dwite Shroot, offered to help if the Bubbly Business Caf would endorse him for "consulting skills" on Linke(DundlerMiffl)in. Dwite knows that a majority of the Bubble Business Caf's customers are international students whose finances depend on the strength of the Canadian dollar. Dwite will be able to provide the Bubbly Business Caf with forecasts about whether the Canadian dollar will appreciate (A$) or depreciate (D$), and since Dwite is a great salesman and forecaster, he has provided the Bubbly Business Caf some additional information on the accuracy of his forecasts: . When tuition increases, Dwite would have forecasted that the Canadian dollar depreciates 80% of the time. When tuition stays the same, Dwite would have forecasted that the Canadian dollar appreciates 60% of the time. Imagine that, instead of asking for an endorsement for his consulting skills, Dwite requests that he be compensated half a million dollars for his forecasting services. Should the Bubbly Business Caf still hire Dwite? The Bubbly Business Caf hire Dwite, because the cost of hiring Dwite is than the value of the information by $ v million. The Bubbly Business Caf should be willing to pay up to the for this information, which is equal to $ million. In the first blank, choose "should" or "should not". In the second blank, choose "larger" or "smaller". In the third blank, choose a number. In the fourth blank, choose "EPPI"/"EVPI"/"EPSI"/"EVSI"/"EMV". In the fifth blank, choose a number. should should not larger smaller EPPI EVPI EPSI EVSI EMV 0.05 0.20 0.30 0.50 0.70 3.80 4.00 4.30 6.00 Bubbly Business Caf is trying to decide should they open a second location, hire more people, or upgrade machines. Depending on increases in tuition or not, they would have different payoffs. There is 25% chance that tuition will increase. The payoff table is as follows. Probability 0.25 0.75 Tuition Tuition Increase Same Open 2nd location Hire more people Upgrade machines -$5 $3 $1 $7 $0 $4 Seeing how the Bubbly Business Caf was struggling to make a decision, Dwite Shroot, offered to help if the Bubbly Business Caf would endorse him for "consulting skills" on Linke(DundlerMiffl)in. Dwite knows that a majority of the Bubble Business Caf's customers are international students whose finances depend on the strength of the Canadian dollar. Dwite will be able to provide the Bubbly Business Caf with forecasts about whether the Canadian dollar will appreciate (A$) or depreciate (D$), and since Dwite is a great salesman and forecaster, he has provided the Bubbly Business Caf some additional information on the accuracy of his forecasts: . When tuition increases, Dwite would have forecasted that the Canadian dollar depreciates 80% of the time. When tuition stays the same, Dwite would have forecasted that the Canadian dollar appreciates 60% of the time. Imagine that, instead of asking for an endorsement for his consulting skills, Dwite requests that he be compensated half a million dollars for his forecasting services. Should the Bubbly Business Caf still hire Dwite? The Bubbly Business Caf hire Dwite, because the cost of hiring Dwite is than the value of the information by $ v million. The Bubbly Business Caf should be willing to pay up to the for this information, which is equal to $ million. In the first blank, choose "should" or "should not". In the second blank, choose "larger" or "smaller". In the third blank, choose a number. In the fourth blank, choose "EPPI"/"EVPI"/"EPSI"/"EVSI"/"EMV". In the fifth blank, choose a number. should should not larger smaller EPPI EVPI EPSI EVSI EMV 0.05 0.20 0.30 0.50 0.70 3.80 4.00 4.30 6.00

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