The Head of Operations for a Movie Studio Wants to Determine

question 151

Multiple Choice

The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. (Due to budgeting constraints, only one new picture can be undertaken at this time.) She feels that script 1 has a 70 percent chance of earning about $10,000,000 over the long run, but a 30 percent chance of losing $2,000,000. If this movie is successful, then a sequel could also be produced, with an 80 percent chance of earning $5,000,000, but a 20 percent chance of losing $1,000,000. On the other hand, she feels that script 2 has a 60 percent chance of earning $12,000,000, but a 40 percent chance of losing $3,000,000. If successful, its sequel would have a 50 percent chance of earning $8,000,000, but a 50 percent chance of losing $4,000,000. Of course, in either case, if the original movie were a flop, then no sequel would be produced.
What is the expected value of selecting script 2?

• A)$15,000,000
• B)$9,060,000
• C)$8,400,000
• D)$7,200,000
• E)$6,000,000

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Definitions:

Turtle Technique

A cognitive-behavior modification intervention that combines elements of problem-solving training, self-instruction training, and relaxation training. It was developed as a way to help students who were emotionally disturbed to inhibit aggression or impulsive responding in social situations and to generate alternative responses. The turtle technique consists of three phases: (1) turtle response, (2) relaxation, and (3) problem solving.

Alternative Strategies

Different methods or approaches that can be used to achieve a specific goal or solve a problem.

Thought Stopping

A cognitive intervention technique used to control or eliminate intrusive thoughts by consciously attempting to interrupt and halt them.

Overt Interruption

An explicit or open disruption in a process or activity.