What is the EMV for Option 1 in the following decision table?
$$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \
\begin{array} { | l | c | c | }
\hline \text { Alternatives } & \mathrm { S } _ { 1 } & \mathrm {~S} _ { 2 } \
\hline \mathrm { p } & .4 & .6 \
\hline \text { Option 1 } & 10,000 & 30,000 \
\hline \text { Option 2 } & 5,000 & 45,000 \
\hline \text { Option 3 } & -4,000 & 60,000 \
\hline
\end{array}$$
A) 10,000
B) 18,000
C) 20,000
D) 22,000
E) 30,000

Question

What is the EMV for Option 1 in the following decision table?
$$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \
\begin{array} { | l | c | c | } 
\hline \text { Alternatives } & \mathrm { S } _ { 1 } & \mathrm {~S} _ { 2 } \
\hline \mathrm { p } & .4 & .6 \
\hline \text { Option 1 } & 10,000 & 30,000 \
\hline \text { Option 2 } & 5,000 & 45,000 \
\hline \text { Option 3 } & -4,000 & 60,000 \
\hline
\end{array}$$
A) 10,000
B) 18,000
C) 20,000
D) 22,000
E) 30,000

Quizplus · Accepted Answer

The EMV (Expected Monetary Value) for Option 1 is calculated as follows: (0.4 * 10,000) + (0.6 * 30,000) = 4,000 + 18,000 = 22,000.

What Is the EMV for Option 1 in the Following