Mathematics · Probability and Decision Making
Saya Co is considering whether to build a small or large cinema. Available market data suggests there is a 30% risk that demand will be low. DemandLow () High()Small100,000400,000Large(-300,000)600,000 Saya Co calculated it would be best to build the large cinema based on the higher expected value. However, Saya Co could commission a survey which would accurately predict the level of demand. What is the maximum (value of perfect information) that Saya Co should pay for the survey?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$100,000
- 2$120,000✓
- 3310,000
- 4$330,000
Correct answer
$120,000
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