The Tamesek Company Is Considering Purchasing One of Two Mutually

question 17

Multiple Choice

The Tamesek Company is considering purchasing one of two mutually exclusive machines. Machine A is most suited to low levels of demand whereas machine B is suited to high-level demand. There are only two possible outcomes and each has the same level of probability. The estimated profits for each demand level are as follows: There is a possibility of employing a firm of management consultants who would be able to provide a perfect prediction of actual demand. What is the maximum amount that the company would be prepared to pay for the additional information?

• A) £98,000
• B) £14,000
• C) £70,000
• D) None of the above

---

Definitions:

Dilukai

A female figure with splayed legs, a common motif over the entrance to a Belau bai, serving as both guardian and fertility symbol.

Oceanic People

Indigenous peoples of the islands in the Pacific Ocean, including Polynesia, Micronesia, and Melanesia, known for their diverse cultures and maritime skills.

Australian Aboriginal Art

A tradition of ancient and contemporary art that includes painting on leaves, wood carving, rock carving, and sand painting, among other forms, created by Indigenous Australians.

Bark

The outermost layers of stems and roots of woody plants, providing protection against environmental threats and helping with water retention.