Question: To mitigate a risk on a project, you need to buy and install a piece of equipment. Vendor A sells the equipment for $20,000 and
To mitigate a risk on a project, you need to buy and install a piece of equipment. Vendor A sells the equipment for $20,000 and Vendor B sells it for $16,000. If you install the equipment from Vendor A, there is a 60% chance that the risk impact will be $15,000 and a 40% chance that the risk impact will be $10,000. If you install the equipment from Vendor B, there is a 30% chance that the risk impact will be $12,000 and a 70% chance that the risk impact will be $15,000. Assuming that Expected Monetary Value (EMV) is the sole criterion for your decision making, which of the two vendors would you buy your equipment from? Clearly explain all steps and show all calculations leading up to your decision
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