Determine what project of the five potential ones to bid on in order to maximize the profit. The payoff matrix is illustrated as follows (in thousands dollars). The probabilities for the possible futures are shown above each future in parenthesis. From the payoff matrix below, find:

a) Which alternative is being dominated so that it can be eliminated from the list?

b) What alternative should be chosen if we use expected value criterion?

 

A A A A As (0.10) (0.30) F F 10 40 0 60 -20 20 -15 30 50 20 (0.15) F 50 40 30 10 35 (0.20) F -20 25 45 50 15 (0.25) Fs 30 15 20 35 10