Dollar Department Stores has received an offer from Harris Diamonds to purchase Dollar's store on Grove Street for $120,000.Dollar has determined probability estimates of the store's future profitability,based on economic outcomes,as: P($80,000)= .2,P($100,000)= .3,P($120,000)= .1,and P($140,000)= .4.
a.Should Dollar sell the store on Grove Street?
b.What is the EVPI?
c.Dollar can have an economic forecast performed,costing $10,000,that produces indicators I₁ and I₂,for which P(I₁_{SYMBOL 189 \f "Symbol"}80,000)= .1;P(I₁_{SYMBOL 189 \f "Symbol"}100,000)= .2;P(I₁_{SYMBOL 189 \f "Symbol"}120,000)= .6;P(I₁_{SYMBOL 189 \f "Symbol"}140,000)= .3.Should Dollar purchase the forecast?

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The Answer of Dollar Department Stores has received an offer from Harris Diamonds to purchase Dollar's store on Grove Street for $120,000.Dollar has determined probability estimates of the store's future profitability,based on economic outcomes,as: P($80,000)= .2,P($100,000)= .3,P($120,000)= .1,and P($140,000)= .4. a.Should Dollar sell the store on Grove Street? b.What is the EVPI? c.Dollar can have an economic forecast performed,costing $10,000,that produces indicators I₁ and I₂,for which P(I₁_{SYMBOL 189 \f "Symbol"}80,000)= .1;P(I₁_{SYMBOL 189 \f "Symbol"}100,000)= .2;P(I₁_{SYMBOL 189 \f "Symbol"}120,000)= .6;P(I₁_{SYMBOL 189 \f "Symbol"}140,000)= .3.Should Dollar purchase the forecast?

Dollar Department Stores Has Received an Offer from Harris Diamonds