The Manager's Utility Function for Profit Is U $\pi$ )= 10 Ln

question 10

Multiple Choice

The manager's utility function for profit is U( $\pi$ ) = 10 ln( $\pi$ ) ,where $\pi$ is the dollar amount of profit.The manager is considering a risky decision with the four possible profit outcomes shown below.The manager makes the following subjective assessments about the probability of each profit outcome: $$\begin{array} { c c } \text { Probability } & \text { Profit outcome (\$) } \\\hline 0.05 & \$ 5,000 \\0.10 & \$ 10,000 \\0.35 & \$ 15,000 \\0.50 & \$ 20,000\end{array}$$ What is the expected utility of profit?

• A)97
• B)245
• C)462
• D)974
• E)1,033

---

Definitions:

Metal Gear Solid

Metal Gear Solid is a popular video game series that combines action, stealth, and story-driven gameplay, focusing on themes of warfare and espionage.

Narrative Transportation Theory

A concept suggesting that when people lose themselves in a story, their attitudes and intentions can change to reflect that story.

Mental Stimulation

The engagement and exercise of the mind through activities, puzzles, reading, or other interactive content that challenges cognitive functions.

Storytelling

The art of conveying messages, themes, or narratives through a well-structured plot and characters, often used in marketing to connect with audiences on an emotional level.