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A company wishes to go ahead with one of three mutually exclusive projects.options of answers are
$3000
5500
6000
7500
Can u explain this .ThanksYou first calculate which project you would choose using the normal expected value criterion.
You then decide which project you would pick and what the profit would be for each of the possible level of sales that the perfect information might tell you, and work out the expected value.
The most to pay for perfect knowledge is the difference between the two expected values.
I explain how to calculate the value of perfect information in my free lectures. The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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