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In addition to the three options, the management is considering another one: ( D ) Extend the existing facility. The profit is estimated to be
In addition to the three options, the management is considering another one: D Extend the existing facility. The profit is estimated to be $k for high demand, $k for medium demand, and $k for low demand, respectively. Which of the following statements isare true? There can be multiple true statements.
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The best option is D because its expected profit is greater than those of other options.
The best option is B because the expected profit of option D does not exceed $k
The firms best expected profit is strictly decreased by adding option D
The firms expected value of perfect information EVPI is not affected by adding option D because it is not selected.
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