buad306 exercise7 - Probability 0.15 0.25 0.45 0.15 With...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Probability 0.15 0.25 0.45 0.15 With Demand Demand Stock 500,000 1,000,000 2,000,000 5,000,000 Stock 500,000 500,000-$1,500,000-$1,500,000-$1,500,000-$1,500,000 500,000-$2,700,000 1,000,000-$4,000,000 $2,000,000 $2,000,000 $2,000,000 1,000,000-$5,200,000 2,000,000-$9,000,000-$3,000,000 $9,000,000 $9,000,000 2,000,000 -$10,200,000 5,000,000 -$24,000,000 -$18,000,000-$6,000,000 $30,000,000 5,000,000 -$25,200,000 Stock Maximax Minimax Equally likely? EMV 500,000-$1,500,000-$1,500,000-$1,500,000-$1,500,000 1,000,000 $2,000,000-$4,000,000 $500,000 $1,100,000 2,000,000 $9,000,000-$9,000,000 $1,500,000 $3,300,000 5,000,000 $30,000,000 -$24,000,000-$4,500,000-$6,300,000 Decision 5,000,000 500,000 2,000,000 2,000,000 EPPI = Sigma CP* (State i) P (State i)= EPPI $8,825,000 EVPI = EPPI - EMV EVPI $5,525,000 Decision Tree Exercise 7 Kevin Shalley This is how much perfect in the maximum amount D=500,000 (.1 D=500,000 (.1 D=1,000,000 ( D=1,000,000 ( D=2,000,000 ( D=2,000,000 ( D=5,000,000 ( D=5,000,000 ( D=500,000(.1 D=500,000(.1 Make 500,000 Make 500,000 D=500,000(.15D=500,000(....
View Full Document

This note was uploaded on 10/20/2010 for the course BUAD BUAD306 taught by Professor Kydd during the Spring '07 term at University of Delaware.

Page1 / 6

buad306 exercise7 - Probability 0.15 0.25 0.45 0.15 With...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online