The lease of Theme Park, Inc., is about to expire. Management must decide whether to renew the

Question:

The lease of Theme Park, Inc., is about to expire. Management must decide whether to renew the lease for another 10 years or to relocate near the site of a proposed motel. The town planning board is currently debating the merits of granting approval to the motel. A consultant has estimated the of Theme Park€™s two alternatives under each state of nature as shown on the following page.

What course of action would you recommend using?
a. Maximax.
b. Maximin.
c. Laplace.
d. Minimaxregret.

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...