Problem 1 tab of the spreadsheet contains a payoff table. The numbers represent profit in millions resulting from investing in various projects. Use the stated models below and identify which project should be selected. All terms have their usual meaning. All relevant Excel work may be shown in a separate worksheet. The results for the maximax model have been shown on the answer sheet for your benefit.

(i) Maximin

(ii) Minmax Regret

(iii) Hurwicz using =0.3

(iv) LaPlace criterion

(v) EV with PI

(vi) EV without PI

(vii) EVPI

0.2 PROBLEM 1 (25 Points) PAYOFF ($, Millions) Low Sales Medium Sales High Sales Very High Sales Probability 0.3 0.4 0.1 Project A -$20 -$10 $30 $50 Project B $50 $30 $70 $40 Project C $60 $45 -$30 $40 ANSWERS for Problem 1 $70 Project B maximax maximin minmax regret Hurwicz, a=0.3 LaPlace EV wih PI EV without PI EVPI