Question: Please solve using excel and show each step to make sure I learn it accordingly. Thank you! Ferry Holmes has been thinking about starting his

Please solve using excel and show each step to make sure I learn it accordingly. Thank you!

Ferry Holmes has been thinking about starting his own independent gasoline station. Ferry's problem is to decide how large his station should be. The annual returns will depend on both the size of the station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Ferry developed the following table:

Size of First Station Good Market Moderate Market Poor Market
Small $60,000 $20,000 $10,000
Medium $80,000 $40,000 -$10,000
Large $120,000 $30,000 -$30,000
Very Large $250,000 $35,000 -$170,000
Probability 0.50 0.30 0.20

Set up a spreadsheet to find the best decision using:

  1. Maximax.
  2. Maximin.
  3. Equally likely.
  4. Expected value.
  5. Minimax Regret.

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