case - reputation he would take this option rather than...

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Assuming Mr. Jaeger chooses to harvest the Riesling grapes before the storm arrives, how much money will he make? b) Assuming Mr. Jaeger chooses to leave the Riesling grapes on the vine, what is the probability that the grapes will end up with botrytis, and how much money will he make if that occurs? c) Taking account of the possibilities and absent any further information, what should Mr. Jaeger do? 1a. If Mr. Jaeger chooses to harvest the Riesling grapes before the storm arrives, he will make $34,200 based on $2.85 per bottle. Assuming he is not worried about damaging his
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Unformatted text preview: reputation, he would take this option rather than selling the grapes in bulk at roughly half the possible $34,200. 1b. There is a 30% chance that the grapes would end up with botrytis if Mr. Jaeger chooses not to harvest them immediately. In doing so, he would be able to acquire $67,200 based on $8 a bottle minus 30% reduction in total revenue. 1c. At this point, Mr. Jaeger has the likelihood to make $34,200 if he chooses to harvest immediately while he can make $39,960 in he chooses not to harvest yet, based on probability....
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This note was uploaded on 03/19/2012 for the course ACCACC 333 taught by Professor Anne during the Fall '11 term at Miami University.

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