Question: Decision making under risk involves considering various choices and several possible outcomes. The learning materials provide an example of this using the choice of factory

Decision making under risk involves considering various choices and several possible outcomes. The learning materials provide an example of this using the choice of factory size and whether there is high, moderate, or low demand. The payoffs are shown in the following table: Payoffs Outcome O1 O2 O3 O4 O5 Choice C1 154 -75 285 182 94 C2 -15 169 -27 -65 -18 C3 55 144 193 208 240 C4 263 223 305 91 345 C5 305 318 374 225 -125 Probability 0.055 0.373 0.298 -0.313 0.755 Which of the following choices has the highest EMV, and what is its value when rounded off to the nearest integer? C4, 457 C4, 421 C5, 408 There is no meaningful answer because there is a negative probability

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