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Refer to the Following:
the Following Payoff Matrix Shows the Profit

Question 38

Multiple Choice

Refer to the following:
The following payoff matrix shows the profit outcomes for three projects, A, B, and C, for each of two possible product prices. There is a 60% probability the price will be $10 and a 40% probability the price will be $20.
 Profit  Project P=$10P=$20A2080B4060C26140\begin{array}{l}\text { Profit }\\\begin{array}{l|c|c|}\hline \text { Project }&P=\$ 10 & P=\$ 20 \\\hline A&20 & 80 \\\hline B&40 & 60 \\\hline C&-26 & 140 \\\hline\end{array}\end{array}
-Using the maximum expected value rule a decision maker would choose


A) A.
B) B.
C) C.
D) impossible to tell from the information

Correct Answer:

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