Exhibit 21-3
Below you are given a payoff table involving two states of nature and three decision alternatives. The probability of the occurrence of state of nature S 1 is 0.4.
-Refer to Exhibit 21-3. The expected value of perfect information equals
A)13,000
B)14,000
C)15,000
D)16,000

Question

Exhibit 21-3
Below you are given a payoff table involving two states of nature and three decision alternatives.  The probability of the occurrence of state of nature S 1 is 0.4.
-Refer to Exhibit 21-3. The expected value of perfect information equals
A)13,000 
B)14,000 
C)15,000 
D)16,000

Quizplus · Accepted Answer

The expected value of perfect information (EVPI) is calculated as the difference between the expected value with perfect information and the expected value without it. Based on the context, the correct calculation leads to an EVPI of 13,000.

Exhibit 21-3 Below You Are Given a Payoff Table Involving Two States