Dollar Department Stores has just acquired the chain of Wenthrope Custom Jewelers. Dollar has received an offer from Harris Diamonds to purchase the Wenthrope store on Grove Street for $129,000. Dollar has determined probability estimates of the store's future profitability, based on economic outcomes, as: P ($85,000) = 0.2, P ($107,000) = 0.3, P ($129,000) = 0.1, and P ($159,000) = 0.4. (a) Should Dollar sell the store on Grove Street? Yes, Dollar should sell the store.No, Dollar should not sell the store.     (b) What is the EVPI (in $)? $  (c) Dollar can have an economic forecast performed, costing $14,000, that produces indicators  I1  and  I2,  for which  P (I1 | 85,000) = 0.1;   P (I1 | 107,000) = 0.2;   P (I1 | 129,000) = 0.6;   P (I1 | 159,000) = 0.3.  Should Dollar purchase the forecast? YesNo

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Dollar Department Stores has just acquired the chain of Wenthrope Custom Jewelers. Dollar has received an offer from Harris Diamonds to purchase the Wenthrope store on Grove Street for $129,000. Dollar has determined probability estimates of the store's future profitability, based on economic outcomes, as: P ($85,000) = 0.2, P ($107,000) = 0.3, P ($129,000) = 0.1, and P ($159,000) = 0.4.
(a)
Should Dollar sell the store on Grove Street?
Yes, Dollar should sell the store.No, Dollar should not sell the store.    
(b)
What is the EVPI (in $)?
(c)
Dollar can have an economic forecast performed, costing $14,000, that produces indicators 
I1
 and 
I2,
 for which 
P (I1 | 85,000) = 0.1;
 
P (I1 | 107,000) = 0.2;
 
P (I1 | 129,000) = 0.6;
 
P (I1 | 159,000) = 0.3.
 Should Dollar purchase the forecast?
YesNo    
 
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In step 4 why did multiply $129000(.6) instead of (.1) like it has in the given.

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