Problem Set 6 Note: You will find the Example videos in the module very helpful in answering these questions. Please type in the space provided and round your answers to the nearest whole dollar. Question 1. The lease of Florida Wimsey Park, Inc., is about to expire. Management must decide whether to renew the lease for another 10 years or to relocate near the site of a proposed motel. The city planning board is currently debating the merits of granting approval to the motel. A consultant has estimated the net present value of Theme Park's two alternatives under each state of nature (options) as shown Alternatives Renew Relocate a. Maximin b. Maximax Which alternative would they select for each approach given below (40 points, 10 points each)? c. LaPlace Options d. Minimax Regret Motel Approved $500,000 $5,000,000 Motel Rejected $4,000,000 $100,000

Problem Set 6 Note: You will find the Example videos in the module very helpful in answering these questions. Please type in the space provided and round your answers to the nearest whole dollar. Question 1. The lease of Florida Wimsey Park, Inc., is about to expire. Management must decide whether to renew the lease for another 10 years or to relocate near the site of a proposed motel. The city planning board is currently debating the merits of granting approval to the motel. A consultant has estimated the net present value of Theme Park's two alternatives under each state of nature (options) as shown Which altemative would they select for each approach given below ( 40 points, 10 points each)