The management of TTT Co must choose whether to go ahead with either of two mutually exclusive projects, A and B. The expected profits are as follows.

	Profit if there is strong demand	Profit if there is moderate demand	Profit if there is moderate demand
Option A	$ 8,000	$ 2,400	$ (2,000)
Option B	$ 3,000	$ 2,000	$ 1,000
Probability of demand	0.2	0.3	0.5

Required:

(a) Based on expected values, what would be the decision (project A or project B), if no information about demand were available.

(b) Calculate the value of perfect information about demand.