Assignment 4 (1206A4w2008)

# Assignment 4 - MGSC 1206.2 Assignment#4 Winter 2008 Due 1 pm Friday February 8th Note Points will be deducted if you do not(a show your work

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MGSC 1206.2 Assignment #4 Winter 2008 Due: 1 pm, Friday, February 8th Note: Points will be deducted if you do not (a) show your work including suitable calculations, (b) use proper notation, and (c) answer word problems with words. Hand in your answers to the following questions: 1. Textbook Problem 9-20 (Chapter 9, pg. 390). OMIT PART (d) OF THIS QUESTION. 2. Cowie Asset Management (CAM) is a property developer that is looking to develop the mainland south area of Halifax. CAM has several projects under consideration, of which it wishes to select one for immediate development. The profitability of each depends upon the amount of economic growth that occurs over the next 5 years. The government has prepared three growth forecasts, with associated probabilities, and CAM has estimated the profitability of each project for each growth scenario, as follows: Forecast Pessimistic Most Likely Optimistic Project A \$250,000 \$400,000 \$450,000 Project B \$200,000 \$450,000 \$750,000 Project C \$300,000 \$300,000 \$300,000 Project D \$100,000 \$250,000 \$1,000,000 Probability 0.15 0.50 0.35 a) What decision should be made according to the maximax decision rule? b) What decision should be made according to the maximin decision rule? c) What decision should be made according to the minimax regret decision rule? d)

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## This note was uploaded on 10/25/2011 for the course MATH 1216 taught by Professor Jang during the Spring '11 term at Saint Mary's University Texas.

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Assignment 4 - MGSC 1206.2 Assignment#4 Winter 2008 Due 1 pm Friday February 8th Note Points will be deducted if you do not(a show your work

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