Problem #4 (5 Points) Chris is considering starting an Information Technology consultancy with some college graduates. He is deciding between hiring 1, 2 or 3 programmers. A programmer can work up to 2000/hours per year, and Chris will be able to charge clients $100/hour for Information Technology services. However he is uncertain of what his demand will be for the year- it could either be low (at 1500 hours/year), medium (at 3500 hours/year) or high (at 6000 hours, year). He must pay the programmer(s) hired a salary of $50,000 apiece, regardless of what demand turns out to be, and firing is not an option! He also can't make his programmer(s) work overtime, so if he has more demand than his programmer(s) can handle, he has to turn that demand away. _ (2 points) Fill in the decision table below (it already has correct dimensions). Express payoffs in terms of expected profit (= Information Technology revenues salary costs) Decisions Outcomes (payoffs) Med. demand High Demand Low demand Hire 1 Hire 2 Hire 3 Hints: Demand will exceed capacity for the upper right part of the payoff table. Salary costs are the same for each entry in a row. (2 points) Given the payoff table, what is Alex's best decision using the following decision criteria? Please show the decision (e.g. "hire 2 programmers"), not just the payoff amount, for full credit. Laplace Maximax Maximin (1 point) Chris thinks there is a 30% chance of low demand and a 50% chance of medium demand. Assuming he is rational and risk neutral, circle his best decision: Circle one: Hire 1 programmer Hire 2 programmers Hire 3 programmers BONUS (1 point) What is the expected value of his decision to hire 3 programmers under provided ratios of demands probabilities? $