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The Operations Manager for a Well-Drilling Company Must Recommend Whether

question 9

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The operations manager for a well-drilling company must recommend whether to build a new facility,expand his existing one,or do nothing.He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: The operations manager for a well-drilling company must recommend whether to build a new facility,expand his existing one,or do nothing.He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows:   If he feels the chances of low,normal,and high precipitation are 30%,20%,and 50%,respectively,what is his expected value of perfect information? A) $140,000 B) $170,000 C) $285,000 D) $305,000 E) $475,000 If he feels the chances of low,normal,and high precipitation are 30%,20%,and 50%,respectively,what is his expected value of perfect information?

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