Question 2 An author is trying to choose between TWO (2) publishing companies that are competing for the marketing rights to her new novel. Company X offered the author RM 10,000 plus RM 2 per book sold. Company Y offered the author RM 2,000 plus RM 4 per book sold. The author believes that there are FOUR (4) levels of demand for the book: 1000, 2000, 3000 and 5000 books are sold. If the probabilities of each level of demand are as follows: Demand Probability 1000 0.31 2000 0.32 3000 0.25 5000 0.12 + a) Construct the payoff table for each level of demand for company X and company Y (10 marks) b) What are the expected monetary value (EMV) and expected opportunity loss (EOL)? Hence determine the best decision that this author should do. (15 marks) [Total: 25 Marks)