Question 6.

Use the decision table below to answer the following question.

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.

In such a case, what is the expected return in dollars?

1. $140,000
2. $59,090
3. $40,000
4. $36,200

Please show workings.