Question: Question 1 (25 marks) A computer shop decides to choose one among four different types of products to sell. The following table indicates the payoff

Question 1 (25 marks) A computer shop decides to choose one among four different types of products to sell. The following table indicates the payoff (net profit in RM) of all the four types of products which the shop considers, together with the possible levels of demand in the market. Product Demand Probability Operating LCD CPU Chip Graphics Card System Monitor Light 0.30 20,000 5,000 -6,000 25,000 Moderate 0.50 22,000 27,000 20,000 25,500 Heavy 0.15 60,000 55,000 48,000 26,000 Boom 0.05 70,000 90,000 106,000 26,500 a) Using expected monetary value (EMV), determine the product that should be sold by this computer shop. (9 marks) b) Calculate the expected value of perfect information (EVPI). (3 marks) c) Using Return-to-Risk ratio (RTRR), determine the product that should be sold by this computer shop. (13 marks)

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