What is the best payoff decision

Assignment Help Basic Statistics

Reference no: EM132465052

ABC can sell surfboards or body boards. the revenues of selling and producing surfboards or body boards depend on how the waves are during this season. If the waves, on average, are bigger than 5Ft, producing and selling surfboards will results in sales of $4,000,000, while producing and selling body boards will lead to sales to $1,500,000. If the waves are smaller than 5 FT, surfboards will result in sales of $1,000,000 and body boards will result in sales of $3,500,000. According to the latest forecast for the 3- month period, there is a 60% chance of getting waves bigger than 5 Ft on average.

Create a payoff table in excel and use it to find the following. Need to see all workings and what is the best payoff decision and what to choose.

A. Maximax

B. Maximin

c. Equal likehood

D. Expected value

Reference no: EM132465052

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