A market research survey is available for $10,000.Using a decision tree analysis,it is found that the expected monetary value with no survey is $62,000.If the expected value of sample information is -$7,000,what is the expected monetary value with the survey?
A)$45,000
B)$62,000
C)-$17,000
D)$55,000
E)None of the above

Question

Quizplus · Accepted Answer

Expected Value with no survey = $62,000
Expected Value of Sample Information = -$7,000
Expected Value with survey = Expected Value with no survey + Expected Value of Perfect Information or Expected Value of Sample Information
Expected Value with survey = $62,000 + (-$7,000)
Expected Value with survey = $55,000
Therefore, the best choice is to conduct the market research survey, which would give an expected monetary value of $55,000.

A Market Research Survey Is Available for $10,000