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The EMV of a Decision with Three States of Nature

question 18

Essay

The EMV of a decision with three states of nature is $50. If the profit/value of A is 1/3 of B and B is 1/3 of C, determine the profit from A if B and C have an equal chance of occurring that combined is twice the chance of A occurring.


Definitions:

Projected Sales

The estimated amount of sales revenue a company expects to earn in a future period, based on market analysis and sales trends.

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