A manager's utility of money schedule is (monetary amounts are in $,000s):
$\begin{array} { c c }
\text { MONEY } & \text { UTILITY } \
100 & 10 \
200 & 18 \
300 & 25 \
400 & 30 \
500 & 32
\end{array}$ Two investment opportunities have the following net present values (again in $000s):
(a) Select the optimal investment based on the expected-value criterion.
(b) Make your selection using the expected-utility criterion.
(c) Comment on the difference in your answers in part (a) and (b).

Question

A manager's utility of money schedule is (monetary amounts are in $,000s):
 $\begin{array} { c c } 
\text { MONEY } & \text { UTILITY } \
100 & 10 \
200 & 18 \
300 & 25 \
400 & 30 \
500 & 32
\end{array}$ Two investment opportunities have the following net present values (again in $000s):
  (a) Select the optimal investment based on the expected-value criterion.
(b) Make your selection using the expected-utility criterion.
(c) Comment on the difference in your answers in part (a) and (b).

Quizplus · Accepted Answer

The Answer of A manager's utility of money schedule is (monetary amounts are in $,000s):
 $\begin{array} { c c } 
\text { MONEY } & \text { UTILITY } \
100 & 10 \
200 & 18 \
300 & 25 \
400 & 30 \
500 & 32
\end{array}$ Two investment opportunities have the following net present values (again in $000s):
  (a) Select the optimal investment based on the expected-value criterion.
(b) Make your selection using the expected-utility criterion.
(c) Comment on the difference in your answers in part (a) and (b).

A Manager's Utility of Money Schedule Is (Monetary Amounts Are MONEY UTILITY 1001020018300254003050032\begin{array} { c c } \text { MONEY } & \text { UTILITY } \\100 & 10 \\200 & 18 \\300 & 25 \\400 & 30 \\500 & 32\end{array} MONEY 100200300400500​ UTILITY 1018253032​

A Manager's Utility of Money Schedule Is (Monetary Amounts Are $\begin{array} { c c } \text { MONEY } & \text { UTILITY } \\100 & 10 \\200 & 18 \\300 & 25 \\400 & 30 \\500 & 32\end{array}$