You Are Evaluating Investment Alternatives for a Ski Resort

question 29

Multiple Choice

You are evaluating investment alternatives for a ski resort.There are four alternative investments and their payoffs (in $10,000s) are shown in the following table,depending on the snow conditions for the next season. If you use the EMV criterion,and the probability that the snow conditions are good is p,what is the expected monetary payoff with perfect information?

• A) It cannot be determined without a numeric value for the probability p.
• B) 18p − 12
• C) 17p − 1
• D) 18p − 12.
• E) 17p + 1

---

Definitions:

Inefficiently

A descriptor for processes or activities that do not use resources in the best possible way, resulting in wasted effort or energy and not achieving maximum productivity.

Economic Growth

Economic growth refers to an increase in the productive capacity of an economy, evidenced by a rise in national income, goods, and services over a period of time.

Technology Advances

The progression and innovation in technology that improve efficiency, productivity, and the quality of life.

Additional Resources

Resources available in addition to those already being used or allocated, often referring to economic or educational assets.