Question: what is the maximum amount you would pay for perfect information should someone be able to provide it? Management has asked you to determine the
what is the maximum amount you would pay for perfect information should someone be able to provide it?
Management has asked you to determine the expected value of perfect information given the following probabilities for each state of nature, N1 = 0.55, N2 = 0.25, N3 = 0.20 States of Nature N2 Decisions Investment 1 Investment 2 Investment 3 N1 500,000 500,000 250.000 400,000 250 000 125,000 N3 (300,000) (200,000) 25,000 What is the maximum amount you would pay for perfect information should someone be able to provide it? 275,000 380,000 5.000 65,000
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