Question: Cheryl is considering purchasing additional sewing machines to accommodate the increasing demand for her cosplay costumes. Her alternatives are to buy 1 machine, 2 machines,

Cheryl is considering purchasing additional sewing machines to accommodate the increasing demand for her cosplay costumes. Her alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether her proposal to bid for clothing the official Bandai team is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios Cheryl faces. The probability that her proposal will be accepted is 65%.

Alternative Proposal Accepted Proposal Rejected
Purchase 1 sewing machine $10 $5
Purchase 2 sewing machines $30 $4
Purchase 3 sewing machines $40 $2

What alternative should Cherly select based on a criterion of realism with = 0.8? Out of these choices.

- Purchase 1 machine

- Purchase 2 machines

- Purchase 3 machines

- Do not buy anything.

Cannot be determined.

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