Macro Instruments is a company that specializes in large scientific instruments. They have been invited to submit a bid on a government contract to produce a specific number of these instruments during the coming year. There might be other companies planning to bid as well. Therefore, the bids must be sealed (so that no company knows what the others are bidding). The lowest bid wins the contract. Macro Instruments estimates that it will cost $6,000 to prepare a bid and $128,000 to supply the instruments if they win the contract. Based on past contracts of this type, Macro Instruments believes the possible low bids from the competition, if there is any competition, and the associated probabilities are those shown in the table below. In addition, Macro Instruments believes there is a 30% chance that there will be no competing bids.

Competitors Bid Amount (if any)	Probability
Less than $170,000	0.05
Greater than $170,000 but less than $175,000	0.10
Greater than $175,000 but less than $180,000	0.60
Greater than $180,000	0.25

Macro Instruments has decided that it has four choices: (1) do not bid, (2) bid $170,000, (3) bid $175,000, or (4) bid $180,000.

1. Create a payoff table.

2. What is Macro Instruments' strategy when they apply the optimistic decision rule?

3. What is Macro Instruments' strategy when they apply the conservative decision rule?

4. What is Macro Instruments' strategy when they want to minimize their highest regret?

5. What is Macro Instruments' strategy when they want to maximize their expected monetary value (EMV)?