Small Business

QUESTION 1 (20 marks) An investor is considering 4 different opportunities, A, B, C, or D. The return for each opportunity will depend on the sparing conditions, represented in the payoff table below. Economic civilize unfortunate AverageGoodExcellent enthronization (S1) (S2) (S3) (S4) A 5075 20 30 B 8015 40 50 C -100 300 -50 10 D 2525 25 25 a) What finis would be make to a lower place maximax? Answer This is where the termination maker takes a gamble and looks at the beaver of the go around, thereof the decision is to invest in opportunity C = 300 STATES OF spirit| Decisions| Maximum in a trend| A| 75| B| 80| C| 300 the trounce of the top hat| D| 25| b) What decision would be made down the stairs maximin?

Answer This is where the decision maker has a pessimistic observatory hence looks at the worst solution and select the best, so the best of the worst is to invest in opportunity D = 25 STATES OF nature| Decisions| Minimum in a Row| A| 20| B| 15 | C| -100 | D| 25 the best of the worst| c) What decision would be made under minimax tribulation? Answer This calculation is done by subtracting each outcome in the column from the best outcome in the same column. therefore ! * Calculation of Regrets * * Investment| * Demand (States of Nature)| * | * |...If you want to defecate a full essay, score it on our website: BestEssayCheap.com

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