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I have a question in the question belton park resort of section c page 51-52. I dont understand how to work out the incremental power costs of the hotel.
What I did: (20000-8000-2200)+50% of 20000-8000-2200
What the revision kit did: (20000-10200)+50% of 20k -10200
I dont understand how they calculated 10200. Can anyone please help me out?
Question 2) Gam Co. Page 54
I have trouble understanding what EV of profit means. I tried calculating by multiplying probability with the sales volume but I dont understand how to go further. Please help me out.
Belton resort:
10,200 is 8,000 + 2,200. So what the book has done is exactly the same as what you have done.
Gam Co
In future, you must start a new thread whenever you are asking about a different topic or question.
To get the expected profit you need to calculate the profit for each of the possible outcomes and then take a weighted average by multiplying by the probabilities. This is all explained in detail in my free lectures on decision making under uncertainty.
Sorry, I will surely keep that in mind.
Thank you very much, I’ve watched all your lecture twice, I understand now ?
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