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Course: BUS 336, Fall 2009
School: Sveriges...
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writer A can sell the exclusive right of her successful book to a TV network or a movie company. The TV network will pay \$900,000. But the movie company will pay \$200,000, \$1,000,000 or \$2,250,000 depending on whether the movie is a flop, success or hit respectively. The prior probabilities for the states of nature are P(success)=0.6 P(flop)=0.3, and P(hit)=0.1. The writer may have a survey done at a cost of...

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writer A can sell the exclusive right of her successful book to a TV network or a movie company. The TV network will pay \$900,000. But the movie company will pay \$200,000, \$1,000,000 or \$2,250,000 depending on whether the movie is a flop, success or hit respectively. The prior probabilities for the states of nature are P(success)=0.6 P(flop)=0.3, and P(hit)=0.1. The writer may have a survey done at a cost of \$60,000. The result (indicator) of the survey would be either a favorable (F) or unfavorable (U) pub...

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