Reference no: EM132075638
Jerry Young is thinking about opening a bicycle shop in his hometown. Jerry loves to take his own bike on 50-mile trips with his friends, but he believes that any small business should be started only if there is a good chance of making a profit. Jerry can open a small shop, a large shop, or no shop at all. Because there will be a five-year lease on the building that Jerry is thinking about using, he wants to make sure that he makes the correct decision. Jerry has done some analysis about the profitability of the bicycle shop. If Jerry builds the large bicycle shop, he will earn $60,000 if the market is good, but he will lose $40,000 if the market is bad. The small shop will return a $30,000 profit in a good market and a $10,000 loss in a bad market. At the present time, he believes that there is a 59% chance that the market will be good.
Jerry also has the option of hiring his old marketing professor for $5,000 to conduct a marketing research study. If the study is conducted, the results could be either favorable or unfavorable. It is estimated that there is a 0.6 probability that the survey will be favorable. Furthermore, there is a 0.9 probability that the market will be good, given a favorable outcome from the study. However, the marketing professor has warned Jerry that there is only a probability of 0.12 of a good market if the marketing research results are not favorable.
(a) Develop a decision tree for Jerry and help him decide what he should do.
(b) How much is the marketing professor's information worth? What is the efficiency of this information?
|
Why did the mortgage default rate increase so sharply
: Why did the mortgage default rate increase so sharply during 2006 and 2007 even before the 2008 - 2009 recession began?
|
|
Several different sauces to use in food products
: The Boatwright Sauce Company is a small manufacturer of several different sauces to use in food products. One of the products is a blended sauce mix
|
|
Construct a decision tree to help analyze problem
: Construct a decision tree to help analyze this problem. What should the medical professionals do? (b) The physicians have been approached
|
|
Evaluate the fundamental reasons of given problem
: "Competitive Markets, Price, Quality, and Monopoly" Please respond to the following:From the e-Activity, analyze at least two (2) primary economic assumptions.
|
|
How much is the marketing professor information worth
: How much is the marketing professor's information worth? What is the efficiency of this information?
|
|
Describe and discuss the item you would select as the most
: Describe and discuss the item you would select as the most important to purchase right away, and share with your fellow students and professor.
|
|
Probabilities of heavy-moderate and light snowfall
: As per the current weather forecasts, the probabilities of heavy, moderate, and light snowfall this winter are 0.4, 0.3, and 0.3, respectively.
|
|
Accuracy of the brother information
: Assume that the following data are available about the accuracy of the brother's information:
|
|
Write a report on a special probation client and program
: Write a report on a special probation/parole client and programs that have been established to address this problem client.
|