Dianna Young is evaluating a plan to expand the production facilities of International Compressors Company which manufactures natural gas compressors.Dianna feels that the price of coal is a significant factor in her decision.Below are her estimates of payoffs from various expansion plans under different prices of coal.If Diana knows the price of coal in the future will be higher, what expansion plan should she select?
A)No expansion
B)Small expansion
C)Medium expansion
D)Cannot determine from information
E)Large expansion

Question

Dianna Young is evaluating a plan to expand the production facilities of International Compressors Company which manufactures natural gas compressors.Dianna feels that the price of coal is a significant factor in her decision.Below are her estimates of payoffs from various expansion plans under different prices of coal.If Diana knows the price of coal in the future will be higher, what expansion plan should she select? 
A)No expansion 
B)Small expansion 
C)Medium expansion 
D)Cannot determine from information 
E)Large expansion

Quizplus · Accepted Answer

Based on the provided information and assuming the only factor impacting the decision is the price of coal, the best choice when expecting a higher future price of coal is a large expansion. This is because a higher price of coal means a higher payoff for larger expansion plans compared to smaller plans, and a large expansion plan has the potential to provide the highest overall payoff. However, it's important to note that this analysis is based on limited information and other factors may also be important in the decision-making process.

Dianna Young Is Evaluating a Plan to Expand the Production