e best, treating the payoffs as profits. (R
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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![Problem 5S-19
Given this payoff table:
Alternative
ABCD
Never
ABCD
ABCD
*Payoff in $ thousands.
a. Determine the range of P(1) for which each alternative would be best, treating the payoffs as profits. (Round your answers to 3
decimal places. Include the indifference point itself.)
Never
0.
STATE OF NATURE
# 1
$ 120*
60
10
90
▼
0
≤ P(1) S
0
≤ P(1) ≤
≤ P(1) S
# 2
20
40
110
90
b. Answer part a treating the payoffs as costs. (Round your answers to 3 decimal places. Include the indifference point itself.)
< P(1) S
< P (1) S
≤ P(1) S
1.00
0.2
0.7
1.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd977dd65-68a6-4103-b2eb-7ca4e0687db8%2Fd5a69d3b-21ee-451a-978d-7da8360dc2e5%2Fbs77v1_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 5S-19
Given this payoff table:
Alternative
ABCD
Never
ABCD
ABCD
*Payoff in $ thousands.
a. Determine the range of P(1) for which each alternative would be best, treating the payoffs as profits. (Round your answers to 3
decimal places. Include the indifference point itself.)
Never
0.
STATE OF NATURE
# 1
$ 120*
60
10
90
▼
0
≤ P(1) S
0
≤ P(1) ≤
≤ P(1) S
# 2
20
40
110
90
b. Answer part a treating the payoffs as costs. (Round your answers to 3 decimal places. Include the indifference point itself.)
< P(1) S
< P (1) S
≤ P(1) S
1.00
0.2
0.7
1.00
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