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Q1) Miramar Company is going to introduce one of 3 new products: a widget, a hummer, or a nimnot. Market conditions (favourable, stable, or unfavourable) will find out profit or loss the company realizes, as listed in following payoff table:
Market Conditions
Favorable
Stable
Unfavorable
Product
.2
.7
.1
Widget
$120,000
$70,000
$-30,000
Hummer
60,000
40,000
20,000
Nimnot
35,000
30,000
i) Calculate expected value for each decision and choose the best one.
ii) Find out how much firm would be eager to pay to a market research firm to gain better information about future market conditions
Q2) Test statistic for this hypothesis test must be:
a) t = 1.95
b) z = 1.95
c) t = 1.38
d) z = 1.38
Q3) Determine the critical value if alpha = 0.05?
a) z.05 = 1.645
b) z.05 = 1.960
c) t.05 = 6.314
d) t.05 = 12.706
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