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Irfan owns a piece of land and he needs to decide whether to build bungalows or condominium on it. He also has the option of selling the land with a profit of RM 1 million. The probability of favourable market is 0.6 and the probability of poor market is 0.4. If the market is favourable, bungalows will bring a profit of RM 4.5 million while condominiums will bring him a profit of RM 4 million. Unfavorable market, on the other hand will result in a loss of RM 1.5 million for bungalows and RM 1.2 million for condominiums. Before a decision is made, he had the opportunity of conduction a customer survey at a cost of RM 0.1 million that has a 0.7 probability of giving positive result and 0.3 probability of showing a negative result. The probability of favourable market given a positive result is 0.8 and the probability of unfavourable market given a negative survey result is 0.7. Required to: (a) Calculate the expected monetary values (EMVS).

Irfan owns a piece of land and he needs to decide whether to build bungalows or condominium on it. He also has the option of selling the land with a profit of RM 1 million. The probability of favourable market is 0.6 and the probability of poor market is 0.4. If the market is favourable, bungalows will bring a profit of RM 4.5 million while condominiums will bring him a profit of RM 4 million. Unfavorable market, on the other hand will result in a loss of RM 1.5 million for bungalows and RM 1.2 million for condominiums. Before a decision is made, he had the opportunity of conduction a customer survey at a cost of RM 0.1 million that has a 0.7 probability of giving positive result and 0.3 probability of showing a negative result. The probability of favourable market given a positive result is 0.8 and the probability of unfavourable market given a negative survey result is 0.7. Required to: (a) Calculate the expected monetary values (EMVS).

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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SCENARIO 2 Irfan owns a piece of land and he needs to decide whether to build bungalows or condominium on it. He also has the option of selling the land with a profit of RM 1 million. The probability of favourable market is 0.6 and the probability of poor market is 0.4. If the market is favourable, bungalows will bring a profit of RM 4.5 million while condominiums will bring him a profit of RM 4 million. Unfavorable market, on the other hand will result in a loss of RM 1.5 million for bungalows and RM 1.2 million for condominiums. Before a decision is made, he had the opportunity of conduction a customer survey at a cost of RM 0.1 million that has a 0.7 probability of giving positive result and 0.3 probability of showing a negative result. The probability of favourable market given a positive result is 0.8 and the probability of unfavourable market given a negative survey result is 0.7. Required to: (a) Calculate the expected monetary values (EMVS).
Transcribed Image Text:SCENARIO 2 Irfan owns a piece of land and he needs to decide whether to build bungalows or condominium on it. He also has the option of selling the land with a profit of RM 1 million. The probability of favourable market is 0.6 and the probability of poor market is 0.4. If the market is favourable, bungalows will bring a profit of RM 4.5 million while condominiums will bring him a profit of RM 4 million. Unfavorable market, on the other hand will result in a loss of RM 1.5 million for bungalows and RM 1.2 million for condominiums. Before a decision is made, he had the opportunity of conduction a customer survey at a cost of RM 0.1 million that has a 0.7 probability of giving positive result and 0.3 probability of showing a negative result. The probability of favourable market given a positive result is 0.8 and the probability of unfavourable market given a negative survey result is 0.7. Required to: (a) Calculate the expected monetary values (EMVS).
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