Decision analysis

TerMite Hills (TH) owns the rights to land which may or may not have copper, a mineral used in semiconductors. There are three options for TH regarding exploration for copper on the land: partner, search for copper on their own, or sell the rights to the land. it is estimated that there is a 35% chance of nding copper on the land TH could establish a partnership with an experienced mining company. in this case TH would receive a payment of $75,000 from the partner company and would also share in the returns if copper is found. In the case where copper is found, TH is estimated to receive $200,000 for their share of the copper in the land. TH could explore for copper on their own. This alternative has a cost of $100,000 no matter what happens as TH must pay for the exploration. If copper is found, TH would receive the entire return estimated at $750,000. The third option for TH is to sell the rights to the land to another party for $120,000. Suppose there is a 30% chance of nding copper on the land (not 35%). Which of the following statements are true regarding the exploration decision at TH? NOTE: Do not forget to remove any earlier changes to your analysis when evaluating this option. 0 The best decision, based on EMV, is for TH to \"explore on own". 0 The EMV of the \"explore on own" decision for TH is $120,000. 0 The expected value with perfect information is $144,000. 0 None of the answers are correct. 0 Based on EMV, TH would be indifferent between two of the decision alternatives