A Firm's Expected Profit Without Information Is $50,000, While Its

question 24

Multiple Choice

A firm's expected profit without information is $50,000, while its expected value with test information is $75,000. If the cost of the test is $40,000, then the expected value of information is:

• A) $85,000.
• B) $35,000.
• C) $25,000.
• D) $10,000.
• E) $40,000.