Question: (b) Minimum EOL Method. Show your Opportunity loss table (regret table) and EOLs down here: Regret Table (show your calculations): Product alternatives Market Conditions Expected

(b) Minimum EOL Method. Show your Opportunity loss table (regret table) and EOLs down here: Regret Table (show your calculations): Product alternatives Market Conditions Expected Values (EOL's) Favorable Stable Unfavorable 0.2 0.7 0.1 Widget 120,000- 120,000 = 0 70,000- 70,000 = 0 30,000 - (-30,000) = 60,000 (0) (0.2) + (0) (0.7) + (60,000) (0.1) 0 + 0 + 6,000= 6,000 Hummer 120,000- 60,000 = 60,000 70,000- 40,000 = 30,000 30,000- 20,000 = 10,000 (60,000) (0.2) + (30,000) (0.7) + (10,000) (0.1) 12,000 + 21,000 + 1000= 34,000 Nimnot 120,000- 35,000 = 85,000 70,000- 30,000 = 40,000 30,000- 30,000\ = 0 (85,000) (0.2) + (40,000) (0.7) + (0) ( 0.1) 17,000 + 28,000 + 0 = 45,000 The value of minimum EOL= ______6,000__________. The best alternative as the decision is : ____Widget___________. (c) (show your calculations) Expected payoff without perfect information (EPw/oPI) = ____(120,000) ( 0.2) + (70,000) (0.7) + (-30,000) (0.1) = 24,000 + 49,000 + -3,000= 70,000 ____________________________________________ . Expected payoff with perfect information (EPwPI) = ______(120,000) (0.2) +(70,000) (0.7) + (30,000) (0.1)= 24,000 + 49,000 + 3,000= 76,000____________________________________________. Expected value of perfect information (EVPI) = EPwPI EPw/oPI = ________76,000- 70,000= 6,000________________________________. (d) If you have only 85%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!