Danielle Johnson graduated from ECC and took a position as an assistant designer at the Flair company in West Des Moines. She is at dinner one evening and her supervisor mentions that he began his college career with some design and computer background. Her supervisor is so excited to hear this as the Flair company is considering the building of a new space. Danielle suddenly realizes that her quantitative background from ECC is being called into service. Nervously, she accepts her supervisor's assignment. The data supplied to Danielle is as follows: Decision Alternative Potential Loss/Gain S1 S2 53 Build D 1 80,000 40,000 10,000 0 80,000 45,000 Don't Build D2 Probabilities .85 .10 .05 1. Using the expected value approach, which decision should Danielle recommend to her supervisor? 2. Using Utility, Danielle assigns the following. P-$80,000 (1.00 Profit Indifference Probability 60,000 45,000 40,000 .65 10,000 .25 .90 .70 3. After completing your indifference table, which decision would Danielle recommend? Is Danielle a risk avoider or a risk taker? Explain how you know. 4