The construction manager for Acme Construction, Inc., must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the population trend as follows: If he feels the chances of declining, stable, and growing population trends are 40 percent, 50 percent, and 10 percent, respectively, what is his expected value of perfect information?
A) $187,000
B) $132,000
C) $122,000
D) $64,000
E) $55,000

Question

The construction manager for Acme Construction, Inc., must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the population trend as follows:  If he feels the chances of declining, stable, and growing population trends are 40 percent, 50 percent, and 10 percent, respectively, what is his expected value of perfect information?
A) $187,000 
B) $132,000 
C) $122,000 
D) $64,000 
E) $55,000

Quizplus · Accepted Answer

The Answer of The construction manager for Acme Construction, Inc., must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the population trend as follows:  If he feels the chances of declining, stable, and growing population trends are 40 percent, 50 percent, and 10 percent, respectively, what is his expected value of perfect information?
A) $187,000 
B) $132,000 
C) $122,000 
D) $64,000 
E) $55,000

The Construction Manager for Acme Construction, Inc