Patricia is researching venues for a restaurant business. She is evaluating three major attributes that she considers
Question:
Show all of your calculations and processes. Describe your answer for each question in complete sentences.
A- Which of the two options should Patricia pursue if she wants to open a restaurant in a suburban area of Los Angeles? Calculate the total expected utility from each restaurant option and compare. Graph is not required. Describe your answer, and show your calculations.
B- Which of the two options should she pick if she plans to open a restaurant in the Los Angeles metropolitan area? Describe your answer, and show your calculations.
C- Which option should she pursue if the probability of finding a restaurant venue in a suburban area can be reliably estimated as 0.7 and in a metropolitan area as 0.3? Describe your reasoning and show your calculations.
D- Provide a description of a scenario in which this kind of decision between two choices, based on weighing their underlying attributes, applies in the "real-world" business setting. Furthermore, what are the benefits and drawbacks, if any, to this method of decision making?
Step by Step Answer:
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding