Question 5

Given a decision matrix with profit data.

Alternative

State of Nature

Decision choices	s1	s2	s3
d1	15	18	-9
d2	10	10	10
d3	-6	15	8

Note that it is expected that the chance S1 occurring is 0.28 and S2 is 0.42. Also note that management has $400,000 to invest in one of the three alternatives seen in the table.

What is the best alternative using the expected value criterion?

A. None of the above

B. d2

C. d3

D. d1