45. A manager has following utility function depicting her attitude towards uncertainty:

(a) The manager is offered an opportunity with following likely returns along with their respective chances.

What is the maximum amount she will be prepared to pay for the opportunity?

(b) How would she decide in the following case involving three mutually exclusive alternatives?
Alternative A 1 Rs 5,000 with a probability 0.50 Rs 2,000 with a probability 0.50 AlternativeA2 Rs 6,000 with a probability 0.50 Rs 1,000 with a probability 0.50 AlternativeA3 Rs 7,000 with a probability 0.50 Rs 0 with a probability 0.50

Amount (x) Rs Utility U(x) 0 0.00 1,000 0.25 2,000 0.40 3,000 0.52 4,000 0.68 5,000 0.80 6,000 0.90 7,000 1.00