Question: Hi there, I would like to know the expected pay-off for L? A newly formed market research firm has to decide on a system for

Hi there, I would like to know the expected pay-off for

Hi there, I would like to know the expected pay-off for L?

A newly formed market research firm has to decide on a system for data analysis and forecasting. Three options are available:

L : leasing a large system, M: leasing a medium-sized system, S : leasing a small system

The estimated payoffs from these systems depend on the overall demand for the firm's services in the market place. Demand may be classified as high (H) or poor (P). The payoffs from each of the systems under these possible outcomes are summarized in the table below:

L? A newly formed market research firm has to decide on a

Payoff Table Assume a 0.4 probability for the event that the demand level is high. That is: P[High demand] = 0.4 and P[Poor demand] = 0.6

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