Determine maximum amount to pay for study

Assignment Help Basic Statistics

Reference no: EM13115648

Mark M.Upp has just been fired as the university bookstore manager for setting prices too low (only 20 percent above suggested retail). He is considering opening a competing bookstore near the campus, and he has begun an analysis of the situation. There are two possible sites under consideration. One is relatively small, while the other is large. If he opens at Site 1 and demand is good, he will generate a profit of $50,000. If demand is low, he will lose $10,000. If he opens at Site 2 and demand is high, he will generate a profit of $80,000, but he will lose $30,000 if demand is low. He also has the option of not opening either. He believes that there is a 50 percent chance that demand will be high. Mark can purchase a market research study. The probability of a good demand given a favorable study is 0.8. The probability of a good demand given an unfavorable study is 0.1. There is a 60 percent chance that the study will be favorable. Should Mark use the study? Why? What is the maximum amount Mark should be willing to pay for this study? What is the maximum amount he should pay for any study?

Reference no: EM13115648

Questions Cloud

Determining cash conversion cycle : Assume a firm's production process requires an average of 75 days to go from raw materials to finished goods sold. If the accounts receivable cycle is 90 days and the accounts payable cycle is 80 days

Impact the policies of a clothing company : guide the decisions of a large oil multinational toward environmental protection, and (b) impact the policies of a clothing company outsourcing its manufacturing

Cultural values of the organisation : "Imagine yourself in a situation of being encouraged to inflate your expense account. Do you think your choice would be most affected by your individual moral development or by the cultural values of the organisation for which you work? Explain"

What is the final pressure in the flask : In a 1.00 L flask, 3.40 atm of CO reacts with 2.60 atm of O2. Assuming that the temperature remains constant, what is the final pressure in the flask.

Determine maximum amount to pay for study : Should Mark use the study? Why? What is the maximum amount Mark should be willing to pay for this study? What is the maximum amount he should pay for any study?

Information regarding ethics for managers : The Word for the study of Values in Philosophy is "Axiology," which has the same root as "Axiom" in mathematics. In Axiology, however, values are studied as to what motivates, inspires, of is responsible for human decision making.

Evalute the acceleration of each block and tension string : Evalute the acceleration of each block and the tension in the string? Repeat the problem, adding a coefficient of kinetic friction between each block and the surface of 0.10.

What is the volume of the container needed : What is the volume of the container needed to store 0.8 moles of argon gas at 5.3 atm and 227°C.

What mass g of calcium nitride forms : when 56.6g of calcium and 30.5g of nitrogen gas underfo a reaction that has a 93.0% yield, what mass g of calcium nitride forms.

User Account

All Pages