Reference no: EM132396661

A company that is introducing a new product has to choose between four marketing plans, A through D. The marketing plans are forecasted to have varying payoffs, depending on the level of advertising. The probability of favorable market is 0.4 and of unfavorable market is 0.6.

Plan Unfavorable Market. Favorable Market

A  -90,000 +250.000

B  100,000 +200,000

C  50,000 +75,000

D  -10,000 +50,000

What is the value of perfect information to the manager?

1. Less than or equal to $60,000
2. More than $60,000, but less than or equal to $70,000
3. More than $70,000, but less than or equal to $80,000
4. More than $80,000

What is expected value of pay offs of strategy A?

1. Less than or equal to $90,000
2. More than $90,000 but less than or equal to $100,000
3. More than $100,000 but lessw than or equal to $110,000
4. More than $110,000 but less than or equal to $120,000