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STATS - Super Cola is considering the introduction

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Question;Super Cola is considering the introduction of a new 8 oz. root beer. The probability that the root beer will be a success is believed to equal 0.6. The payoff table is as follows:Success (s1) Failure (s2)Produce $250,000 -$300,000Do Not Produce -$50,000 -$20,000Company management has determined the following utility values:Amount $250,000 -$20,000 -$50,000 -$300,000Utility 100 60 55 0A) What is the Expected Utility of each of Super Cola?s decision alternatives?B) Is the company a risk taker, risk averse, or risk neutral?C) What is Super Cola's optimal decision?

 

Paper#61462 | Written in 18-Jul-2015

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