learning portal. All other students MUST submit hard copies. L Limited is a large family-owned company working in the highly competitive electricity generation sector. The shareholders of L Limited see the business as mature and want it to offer a stable, long term retum on capital. However, recently. L limited had to seek emergency refinancing due to its thin profit margins and tough competition, both of which are forecast to continue. As a result, L shareholders and management are concerned for the survival of the business and are looking for new investment opportunities as a way to generate some additional cash flow. The management has recently had an idea of designing and manufacturing high performance turbines which generate electricity. This will involve designing and building pylons, housing and turbine blades as well as supply the generators to be fitted inside the housing The management is currently faced with a decision about the design of the pro There are three design choices depending on the power which the wind turbines can generate (measured in megawatts (MW): Design type Description A a large & MW unit B a medium 3 MW unit a basic I MW unit The demand for the different types of units is uncertain. It is believed that demand may be as follows: Demand Probability 1,000 units 03 1.500 units 0.5 2,000 units 0.2 Kim Kim The estimated costs and prices for the units are: Type Variable cost per unit Fixed costs Price per unit Kim 10.4 7.500 20.8 B 4.8 820 9.6 1.15 360 4.6 The fixed costs cover the initial design, development and testing of the units Required: (a) Using four different methods of decision making under uncertainty, assess the different types of wind turbines, recommending to management which turbine they should invest in under each method. (25 marks) (b) Assess the risk appetite of the management of L limited and provide a justified recommendation as to which turbine should be invested in. (5 marks) (c) Explain what is meant by maximax, maximin and minimax regret rules, using the information in the scenario to illustrate your explanations (10 marks) Total (40 marks)