The Operations Manager for a Well-Drilling Company Must Recommend Whether

question 42

Multiple Choice

The operations manager for a well-drilling company must recommend whether to build a new facility,expand his existing one,or do nothing.He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: If he feels the chances of low,normal,and high precipitation are 30%,20%,and 50%,respectively,what is his expected value of perfect information?

• A) $140,000
• B) $170,000
• C) $285,000
• D) $305,000
• E) $475,000

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Definitions:

Radio Waves

Electromagnetic waves with the longest wavelengths in the electromagnetic spectrum, used in communication systems to transmit data over long distances.

Magnetic Fields

A vector field that describes the magnetic influence on moving electric charges, electric currents, and magnetic materials.

Pineal Gland

A small, pea-shaped gland in the brain that produces melatonin, a hormone that regulates sleep-wake cycles.

Insulin

A substance secreted by the pancreas that controls blood glucose levels by promoting glucose absorption into the body's tissues.