Calculating expected value for decision

Assignment Help Basic Statistics

Reference no: EM1321984

Q1) Miramar Company is going to introduce one of 3 new products: a widget, a hummer, or a nimnot. Market conditions (favourable, stable, or unfavourable) will find out profit or loss the company realizes, as listed in following payoff table:

	Market Conditions
	Favorable	Stable	Unfavorable
Product	.2	.7	.1
Widget	$120,000	$70,000	$-30,000
Hummer	60,000	40,000	20,000
Nimnot	35,000	30,000	30,000

i) Calculate expected value for each decision and choose the best one.

ii) Find out how much firm would be eager to pay to a market research firm to gain better information about future market conditions

Q2) Test statistic for this hypothesis test must be:

a) t = 1.95

b) z = 1.95

c) t = 1.38

d) z = 1.38

Q3) Determine the critical value if alpha = 0.05?

a) z.05 = 1.645

b) z.05 = 1.960

c) t.05 = 6.314

d) t.05 = 12.706

Reference no: EM1321984

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