3325p11hs a decision making tools

Given negative survey results emv4 27190000 73 190000

Info iconThis preview shows page 1. Sign up to view the full content.

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

Unformatted text preview: 2. Given negative survey results EMV(4) = (.27)($190,000) + (.73)(-$190,000) = -$87,400 EMV(5) = (.27)($90,000) + (.73)(-$30,000) = $2,400 The EMV for no plant = -$10,000 so, The if the survey results are negative, build the small plant build A – 29 Complex Example 3. Compute the expected value of the Compute market survey market EMV(1) = (.45)($106,400) + (.55)($2,400) = $49,200 4. If the market survey is not conducted EMV(6) = (.5)($200,000) + (.5)(-$180,000) = $10,000 EMV(7) = (.5)($100,000) + (.5)(-$20,000) = $40,000 The EMV for no plant = $0 so, given no The survey, build the small plant survey, A – 30 Decision Trees in Ethical Decision Making Maximize shareholder value and Maximize behave ethically behave Technique can be applied to any Technique action a company contemplates action A – 31 Decision Trees in Ethical Decision Making Yes Yes Is Is action legal? legal? Is it ethical? (Weigh the Is affect on employees, customers, suppliers, community verses shareholder benefit) shareholder Does action Does maximize company returns?...
View Full Document

This document was uploaded on 02/19/2014.

Ask a homework question - tutors are online