Sample Test

Your firm in considering no investment projects and R. Given the hudly constraints, you must choose either A er B, but not hath.

Project A will provide a net return of either $30. SA, or $50, respectively depending on whether there will be a recession, normal conditions, ar a hoom, The figures for Project Bar SM, 30. of 566, respectively

Forecast indicate that given the current trends in appropriate

economic indicators in the following year the chances are 20% data

recession will occur, 60% that the economic conditions will stay as they are and 20% that the economy will enjoy a bao.

DMVU: 2. If There were an ncertain decision situation rather than one under risk, what would your choice be under the condition of perfect optimism(MXMX), perfect pessimism MXMN), optimism at 6, equal likelihood, and minimization of regrets?

DMUR: 3. What is the expected value of each alternative? Which alternative miss you choose from this point of view

PLEASE Explain

Sample Test

Nour firm ix considering no investment projects and R. Ghin the hult constraints, you must choose either A er B, but mot hath.

Project A will provide a net return of either S30. S4a or S50. respectively depending on whether there will be a recession, normal conditions, or a hoom. The fines for Project B are S28, 30. or S60, respectively.

Forecast indicate that given the current trends in appropriate

economic Indicators in the following year the chances are 20% shat a

recession will occur, 60% that the economic conditions will stay as they are and 20% that the enemy will enjoy a book.

1. Construct a payoff table.

DMVU: 2. If There were an uncertain decision situation rather than me under risk, what would your choice be under the condition of perfect optimism(Maximax), perfect pessimism(Maximin), optimism at 6, equal likelihood, and minimization of regret?

DMUR: 3. What is the expected value of each alternative Which alternative use you choose from this point of view

4. Which project should be chosen on the basis of the calculation of coefficient of variation - Calculate the probability of making it least S45 net return on Projects A&B