The management of a mining company must decide
whether to continue an operation at a certain location. If they continue and are successful, they will make a profit of $4,500,000; if they continue and are not successful, they will lose $2,700,000; if they do not continue but would have been successful if they had continued, they will lose $1,800,000 ( for competitive reasons ); and if do not continue and would not have been successful if they had continued, they will make a profit of $450,000 ( because funds allocated to the operation ramind unspent ). What decision would maximize the company's expected profit if it is felt that there is a 50-50 chance for success?
Show that is does not matter what they decide to if it is felt that the probabilities for and against success are, respectively, ⅓ and 2/3