Question: The manager's utility function for profit is U ( ) = 10 ln( ) , where is the dollar amount of profit. The manager is

The manager's utility function for profit is U() = 10 ln(), where is the dollar amount of profit. The manager is considering a risky decision with the four possible profit outcomes shown below. The manager makes the following subjective assessments about the probability of each profit outcome:

Probability Profit outcome ($)
0.05 $5,000
0.10 $10,000
0.35 $15,000
0.20 $20,000

What is the expected utility of profit?

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