Florentino Allers is the production manager of Electronics Manufacturer. Due to limited capacity, the company can only produce one of two possible products: An industrial motherboard with a 70% probability of making a profit of $1 million and a 30% probability of making a profit of $170,000 A regular motherboard with a 100% chance of making a profit of $680,000 Florentino will get a 20% bonus from his department. Florentino has the responsibility to choose between the two products and is more of a risk taker, more so than most of the top management at Electronics Manufacturer A. Which option is Florentino more likely to choose and why? (even though there is a Florentino will choose the industrial motherboard since he is a risk-taker, and a 70% chance of a $1 million profit is much the s 30% chance of a $170,000 profit with the industrial motherboard). higher than B. Which option would the company be more likely to choose and why? lower than The company, being a taker than Florentino, would prefer the regular motherboard because of the certamy reg $ the industrial motherboard is $ the potential difference of s to offset the only earning $170,000. While the expected value of (30% chance) of c. What changes should the company make to Florentino's compensation to avoid unnecessary risks? The company should the size of the bonus and the salary, thus leveling the playing field when it comes to risk-taking. B. Which option would the company be more likely to choose and why? While the expected value of The company, being a the industrial motherboan only earning $170,000. taker than Florentino, would prefer the regular motherboard because of the certainty of earnings the potential difference of $ to offset the (30% chance of higher risk lower risk C. What changes should th jake to Florentino's compensation to avoid unnecessary risks? The company should the size of the bonus and the salary, thus leveling the playing field when it comes to risk-taking. The company, being a taker than Florentino, would prefer the regular motherboard because of the certainty of earnings While the expected value of the industrial motherboard is $ the potential difference of s to offset the (30% chance) of only earning $170,000. higher C. What changes should the company make to Flo compensation to avoid unnecessary risks? lower The company should the size or the donus and the salary, thus leveling the playing field when it comes to risk-taking. B. Which option would the company be more likely to choose and why? The company, being a taker than Florentino, would prefer the regular motherboard because of the certainty of earnings While the expected value of the industrial motherboard is 5 the potential difference of $ to offset the 30% chance) of only earning $170,000 enough c. What changes should the company make to Florentino's compensation to avoid unnecessary risks? not enough The company should the size of the bonus and the salary, thus levelingrutte prerygield when it comes to risk-taking B. Which option would the company be more likely to choose and why? The company, being a taker than Florentino, would prefer the regular motherboard because of the certainty of earnings While the expected value of the industrial motherboard is $ the potential difference of $ to offset the (30% chance) of only earning $170,000. higher risk C. What changes should the company make to Florentino's compensation to avoid unnecessary risks? lower risk The company should the size of the bonus and the salary, thus leveling the playing field when it comes to coming mus motherboard) B. Which option would the company be more likely to choose and why? The company, being a the industrial motherboard is $ only earning $170,000. taker than Florentino, would prefer the regular motherboard because of the certainty of earnings the potential difference of $ to offset the While the expected value (30% chance IS c. What changes should the company make to Florentino's compensation to avoid unnecessary risks? The company should the size of the bonus and the salary, thus leveling the playing field when it comes to risk-taking. increase reduce the industrial motherboard is s only earning $170,000. the potential difference of s to offset the C. What changes should the company make to Florentino's compensation to avoid unnecessary risks? The company should the size of the bonus and the salary, thus leveling the playing field when it comes to risk-taking. increase reduce