Consider a scenario in which state colleges must actively recruit students. California Sci has $750,000 in assets available. Its Board of Regents has to consider several options. The board may decide to do nothing and put the $750,000 back into the college operating budget. They may directly advertise, spending $250,000 of the assets for an aggressive social media email campaign for both in- and out-of-state students. This campaign has a 75% chance of being successful. The college denes successful as ``bringing in'' 100 new students at $43,500 a year in tuition. The Board of Regents was approached by a marketing rm expert in social media advertising. For an additional cost of $150,000, the marketing rm will create a stronger social media strategy. The marketing rm boasts a 65% chance of favorable results. If successful, there is a 90%
chance that the advertising will raise the number of new students from 100 to about 200. If not successful, there will be only a 15% chance that it will raise the number of new students from 100 to about 200. If the college wants to maximize its expected asset position, then what should the Board of Regents do?