User Account

All Pages

question, Business Management

Assignment Help:
Consider the following new business venture. An agent is considering investment in one of three real estate parcels:
• Option 1: multiunit rentals
• Option 2: commercial building
• Option 3: rural land development
The agent has a five-year time horizon and wishes to evaluate the opportunities irrespective of tax implications. However, the overriding consideration in the geographical market under study is the profitability of the market selected. The agent identified four possibilities as the fastest-growth markets:
• G1: Urban areas are the fastest growth.
• G2: Industrial development is the fastest growth.
• G3: Rural areas will grow most rapidly.
• G4: Growth will be balanced in all three areas.
The agent felt that each event or state of nature (G) was equally likely.
a. What management science tool is best for this problem and why?
b. What action would you recommend in light of the following payoff table? Show your solution in both a decision table and a decision tree. The decision tree may be hand drawn and scanned if you wish.

Option G1 G2 G3 G4
O1 $12,310,000 $10,750,00 $200,000 $35,000,000
O2 $10,860,000 $13,122,000 $500,000 $27,000,000
O3 $600,000 $9,900,000 $6,450,000 $21,000,000

c. A research firm has completed a growth study and has made projections. Its studies have been 95 percent reliable in the past, but you wonder if the new study will be worth its $700,000 price tag. The firm will sell the study only to one party who will retain proprietary rights.
d. Assume that you purchased the research that then showed:
• Pr(G1) = 0.10
• Pr(G2) = 0.20
• Pr(G3) = 0.45
• Pr(G4) = 0.25
What action would you take? What is the expected payoff? How sensitive is the action to changes in the probabilities?
e. If you were the agent in this case would you use these results, modify them or ignore them? Justify your answer.

Related Discussions:- question

Demonstrates the skill at different levels of management, Demonstrates the ...

Demonstrates the skill at different levels of management? Require for a skill at various levels of Management is demonstrated below into the diagram as demonstrated below:

Furniture making firm could use is and it, Describe the ways in which a fur...

Describe the ways in which a furniture making firm could use IS and IT to transform its manufacturing operations. Computer aided design (CAD) CAD can improve designs and s

Relation between production and manufacturing budget, What is the relation ...

What is the relation between production and manufacturing budget? Relation between production and manufacturing budget: Production budget is a fraction of manufacturing bu

Explain diffusion of innovation theory, A) "Diffusion of innovation theory ...

A) "Diffusion of innovation theory is relevant to software, where software is considered as an innovation. In particular, the elements of diffusion, the innovation decision process

The importance of body language, The importance of body language Any t...

The importance of body language Any two reasons described. For example: Good communication skills are important to improve the level of customer services (thereby helpi

Primary system development models, Problem 1. Identify three types of s...

Problem 1. Identify three types of systems or system upgrades that may be ideal candidates for a Waterfall Development Model strategy Identifying and explaining the three

Investment portfolio strategy, From your past investment portfolio strategy...

From your past investment portfolio strategy and your explanation to your client, outline the basis of your future portfolio for the same principal and indicate the rationale for y

International marketing, explain culture and its elements

explain culture and its elements

Define the term waste management, (i) Define the term waste management (...

(i) Define the term waste management (ii) You are requested to come up with a proposal for the management of solid wastes arising from a community living in an island. Given tha

Implementing an e-business strategy at digiland, QUESTION Read the case...

QUESTION Read the case study found on page 5 of the question paper and answer the questions below: (a) What are the impacts of implementing an E-Business strategy at Digilan

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd