Project certainty equivalence for decision maker

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Suppose a project has two possible outcomes. There is a 30% chance that it brings a profit of 10,000. There is a 70% chance that it brings a profit of 3,600. Suppose a decision makers utility function can be described by U(w)=w^0.5. What is this project's certainty equivalence for this decision maker?

Reference no: EM131166353

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Project certainty equivalence for decision maker : Suppose a project has two possible outcomes. There is a 30% chance that it brings a profit of 10,000. There is a 70% chance that it brings a profit of 3,600. Suppose a decision makers utility function can be described by U(w)=w^0.5. What is this proj..

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