Alexander industries is considering purchasing an insurance

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Alexander Industries is considering purchasing an insurance policy for its new office building in St. Louis, Missouri. The policy has an annual cost of $30,000. If Alexander Industries does not purchase the insurance and minor fire damage occurs, a cost of $200,000 is anticipated; the cost if major or total destruction is $300,000. The costs, including the state-of-nature probabilities, are:


Damage

Decision Alternative

None, s1

Minor, s2

Major, s3

Purchase insurance, d1

30,000

30,000

30,000

Reference no: EM13620300

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