Marvin Marvy Ryder runs a small circus. He has currently booked the Champion County Fairgrounds for the
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Marvin “Marvy” Ryder runs a small circus. He has currently booked the Champion County Fairgrounds for the week beginning July 8th. He knows that his profit or loss will depend on the weather; he expects a $12,000 profit if the weather is good overall, a $4,000 profit if the weather is so-so, and an $8,000 loss if the weather is bad. By looking at data for past weather on these dates in Champion County, he estimates that the chances of good, so-so and bad weather are ¼, ½, and ¼. He also has the option of canceling the show but would then forfeit the $2,000 deposit he has already made to reserve the site.
- Construct an appropriate decision tree.
- What should Marvy do and what is the expected profit from doing so?
Related Book For
Advanced Accounting
ISBN: 9780132568968
11th Edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
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