Exhibit 21-4
Below you are given a payoff table involving two states of nature and three decision alternatives. 
The probability of the occurrence of S1 = 0.3.
-Refer to Exhibit 21-4. The recommended decision alternative based on the expected monetary value is
Definitions:
Present Value
The determination of today's monetary value for a future cash sum or succession of cash flows, applying a chosen rate of return.
Interest Rate
The portion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
Years From Now
A phrase referring to an unspecified point in the future, measured from the current date.
Interest Rate
The cost of borrowing money, usually expressed as a percentage of the total amount loaned.
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