question:

Christaker is considering transitioning to a new job next year. He will either keep his current job which pays a net income of $77,000 or switch to a new job. If he changes jobs, his net income will vary depending on the state of the economy. He estimates that the economy will be Strong with 40% chance ($85,000 net income), Average with 20% chance ($76,000 net income), or Weak with 40% chance ($62,000 net income). Part A 1. What is the best expected value for Christaker and the corresponding decision using the Expected Monetary Value approach? $ Select an answer V] 2. What is the expected value of perfect information (EVPI)? $ Part B Christaker can hire Sandeep, a mathematical economist, to provide information regarding the state of the economy next year. Sandeep will either predict a Good or Bad economy, with probabilities 0.55 and 0.45 respectively. If Sandeep predicts a Good economy, there is a 0.5 chance of a Strong economy, and a 0.32 chance of an Average economy. If Sandeep's prediction is Bad, then the economy has a 0.52 chance of being Weak and 0.42 chance of being Average. 1. If Sandeep predicts Good economy, what is the expected value of the optimal decision? $ 2. If Sandeep predicts Bad economy, what is the expected value of the optimal decision? $ 3. What is the expected value with the sample information (EVwSI) provided by Sandeep? $ 4. What is the expected value of the sample information (EVSI) provided by Sandeep? $ 5. If cost of hiring Sandeep is $280, what is the best course of action for Christaker? [Select an answer V 6. What is the efficiency of the sample information? Round % to 1 decimal place