Landloc, a real estate development firm, is considering several alternative development projects. These include building and leasing an office building, purchasing a parcel of land and building a parking lot, buying and leasing a warehouse, building a shopping mall, and building and selling condominiums. The financial success of these projects depends on interest rate movement in the next five years. The various development projects and their five-year financial return ($ millions) given that interest rates will decline, remain stable, or increase are shown in the following table.

Project	Interest Rates
Decline	Stable	Increase
Office Building	0.5	1.7	4.5
Parking lot	1.5	1.9	2.4
Warehouse	1.7	1.4	1.0
Shopping mall	0.7	2.4	3.6
Condominiums	3.2	1.5	0.6

I. Determine the best investment using the following decision criteria.

Minimax regret

The Hurwicz criterion (assume =0.3)

II. Assume that the Landloc real estate development firm has hired an economist to assign a probability to each direction interest rates may take over the next five years. The economist has determined that there is a 0.50 probability that interest rates will decline, a 0.40 probability that rates will remain stable, and a 0.10 probability that rates will increase.

a. Using expected value, determine the best project.

b. Determine the expected value of perfect information