What is the EMV for Option 2 in the following decision table? States of Nature
$$\begin{array} { | c | c | c | }
\hline \text { Alternatives } & \mathrm { S } _ { 1 } & \mathrm {~S} _ { 2 } \
\hline \mathrm { p } & .4 & .6 \
\hline \text { Option 1 } & 10,000 & 30,000 \
\hline \text { Option 2 } & 5,000 & 45,000 \
\hline \text { Option 3 } & - 4,000 & 60,000 \
\hline
\end{array}$$
A) 5,000
B) 21,000
C) 25,000
D) 29,000
E) 45,000

Question

What is the EMV for Option 2 in the following decision table? States of Nature
$$\begin{array} { | c | c | c | } 
\hline \text { Alternatives } & \mathrm { S } _ { 1 } & \mathrm {~S} _ { 2 } \
\hline \mathrm { p } & .4 & .6 \
\hline \text { Option 1 } & 10,000 & 30,000 \
\hline \text { Option 2 } & 5,000 & 45,000 \
\hline \text { Option 3 } & - 4,000 & 60,000 \
\hline
\end{array}$$
A) 5,000
B) 21,000
C) 25,000
D) 29,000
E) 45,000

Quizplus · Accepted Answer

The EMV (Expected Monetary Value) for Option 2 is calculated as follows: EMV = (0.4 * 5,000) + (0.6 * 45,000) = 2,000 + 27,000 = 29,000.

What Is the EMV for Option 2 in the Following