Solutions Probability

Nick has plans to open some pizza restaurants, but he is not sure how many to open. He has prepared

Question: 3 Nick has plans to open some pizza restaurants, but he is not sure how many to open. He has prepared a payoff table to help analyze the situation.

	States of Nature
Alternatives	Good Market	Fair Market	Poor Market
Open 1	380,000	70,000	-400,000
Open 2	200,000	80,000	-200,000
Do Nothing	0	0	0

Nick believes that there is a 40 percent chance that the market will be good, a 30 percent chance that it will be fair, and a 30 percent chance that it will be poor. A market research firm will analyze the market conditions and will provide a perfect forecast of the future (they provide a money back guarantee). What is the most that should be paid for this forecast?

Price: $2.99

Answer: The downloadable solution consists of 2 pages
Type of Deliverable: Word Document