Question: Exercise Set 2- Part II Decision Making Under Risk 2. Delta has surveyed the market and has determined that there is a 10% chance low

Exercise Set 2- Part II Decision Making Under Risk 2. Delta has surveyed the market and has determined that there is a 10% chance low increase in market demand, a 30% chance of medium increase, and a 45% chance of high increase. (Assume that the cost of the survey is zero.) a. Calculate expected return for each decision alternatives and find the best decision alternative. b. Calculate EV (or EVUII) c. Calculate EVUPI (or EVwPI) d. Delta is considering hiring a firm that can predict the market for them. What maximum amount should Delta pay for perfect information (or what is EVPI)? Exercise Set 2- Part II Decision Making Under Risk 2. Delta has surveyed the market and has determined that there is a 10% chance low increase in market demand, a 30% chance of medium increase, and a 45% chance of high increase. (Assume that the cost of the survey is zero.) a. Calculate expected return for each decision alternatives and find the best decision alternative. b. Calculate EV (or EVUII) c. Calculate EVUPI (or EVwPI) d. Delta is considering hiring a firm that can predict the market for them. What maximum amount should Delta pay for perfect information (or what is EVPI)

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