Exhibit 21-5
Below you are given a payoff table involving three states of nature and three decision alternatives. The probability of occurrence of S 1 is 0.2 and the probability of occurrence of S 2 is 0.3.
-Refer to Exhibit 21-5. The expected value of perfect information is
A)18.2
B)11.7
C)51
D)37

Question

Exhibit 21-5
Below you are given a payoff table involving three states of nature and three decision alternatives.  The probability of occurrence of S 1 is 0.2 and the probability of occurrence of S 2 is 0.3.
-Refer to Exhibit 21-5. The expected value of perfect information is
A)18.2 
B)11.7 
C)51 
D)37

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 given options, 11.7 is the correct calculation for EVPI.

Exhibit 21-5 Below You Are Given a Payoff Table Involving Three States