A.) Use the expected value approach to decide whether tomarket the new product.
B.) Because of the high dollar values invloved; especially thepossibility of a 100,000 loss, the marketing vice president hasexpressed some concern about the use of the expected valueapproach. As a consequence, is a utility analysis is performed,what is the appropriate lottery?
C.) Assume the following indifferences probabilities areassigned. Do the utilities reflect the behavior os a risk taker ora risk avoider?
Profit: Indifference Probability
D.) Use expected utility to make a recommendationdecision.
E.) Should the decision maker feel comfortable with the finaldecision recommended by the analysis?
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