Napoleon is contemplating four institutions of higher learning as options for a Masters in Business Administration. Each university has strong and weak points and the demand for MBA graduates is uncertain. The availability of jobs, student loans, and financial support will have a significant impact on Napoleon's ultimate decision. Vanderbilt and Seattle University have comparatively high tuition, which would necessitate Napoleon take out student loans resulting in possibly substantial student loan debt. In a tight market, degrees with that cachet might spell the difference between a hefty paycheck and a piddling unemployment check. Northeastern State University and Texas Tech University hold the advantage of comparatively low tuition but a more regional appeal in a tight job market. Napoleon gathers his advisory council of Kip and Pedro to assist with the decision. Together they forecast three possible scenarios for the job market and institutional success and predict annual cash flows associated with an MBA from each institution. All cash flows in the table are in thousands of dollars.

School

Scenario 1

Scenario 2

Scenario 3

Vanderbilt

85

20

-10

Texas Tech

55

80

60

Seattle

90

10

80

Northeastern State

65

50

90

Suppose that the likelihood for each of the scenarios 1 through 3 is 0.3, 0.4, and 0.3, respectively. What is the optimal decision under the expected opportunity loss criterion?

Area Lake's business owner is trying to decide whether to buy, rent, or lease office space and has constructed the following payoff table based on whether business is brisk or slow.

AlternativeBriskSlow

Buy90-10

Rent7040

Lease6055

Determine the minmax regret criterion decisionis: