The Head of Operations for a Movie Studio Wants to Determine

question 16

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.She feels that script #1 has a 70% chance of earning $100 million over the long run,but a 30% chance of losing $20 million.If this movie is successful,then a sequel could also be produced,with an 80% chance of earning $50 million,but a 20% chance of losing $10 million.On the other hand,she feels that script #2 has a 60 % chance of earning $120 million,but a 40% chance of losing $30 million.If successful,its sequel would have a 50% chance of earning $80 million and a 50% chance of losing $40 million.As with the first script,if the original movie is a "flop",then no sequel would be produced.
-What is the expected payoff for the optimum decision alternative?

• A)$150 million
• B)$90 6 million
• C)$84 million
• D)$72 million
• E)$60 million

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Definitions:

Specify Action Steps

The process of clearly defining the specific actions or tasks required to achieve a goal or complete a project.

Culturally Competent Practice

Professional approaches that respect and effectively address the beliefs, behaviors, and needs of individuals from diverse cultural backgrounds.

Self-Determination

The right or ability of individuals and communities to make choices and govern themselves, without external coercion or limitations.