Question: The manager's utility function for profit is u(pi) = 10 ln(pi), where pi is the dollar amount of profit. The manager is considering a risky
The manager's utility function for profit is u(pi) = 10 ln(pi), where pi 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: What is the expected profit of Project A and Project B? What is the manager's expected utility of profit for Project A and Project B? If this manager is maximizing expected utility, which project will be chosen
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