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Calculate the expected value of perfect information

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Question: What is the expected value of perfect information in the situation of problem? Explain.

Problem: During the Super Bowl, a 30-second commercial costs $2.5 million.7 The maker of Doritos corn chips was considering purchasing such an ad. The marketing director felt that there was a 0.35 probability that the commercial would boost sales volume to $20 million over the next month; there was a 0.60 probability that excess sales would be $10 million; and a 0.05 probability that excess sales would be only $1 million. Carry out an analysis of whether to purchase a 30-second commercial during the Super Bowl using a complete decision tree.

Reference no: EM131710343

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