The Manager's Utility Function for Profit Is U $\pi$ )= 10 Ln

question 49

Multiple Choice

The manager's utility function for profit is U $\pi$ ) = 10 ln $\pi$ ) ,where $\pi$ is the dollar amount of profit.The manager is considering a risky decision with the four possible profit outcomes shown below.The manager makes the following subjective assessments about the probability of each profit outcome: What is the expected utility of profit?

• A)97
• B)245
• C)462
• D)974
• E)1,033