Consider that you are a risk averse manager who has the following prospects of an investment:

Certain prospect: you get $15,000 (for certain) with a utility of 35 or;

Uncertain prospect:

-if the project is successful you get $19,000 (probability of 30%) with a utility of 37;

-if the project is unsuccessful you get $10,000 (probability of 70%) with a utility of 25; and

Assume that $13,500 is the certainty equivalent and corresponds to a utility of 30

a)Provide an illustration of relationship between utility and income(4 marks)

b)What is the EMV of the project? (show workings)