Determine the best alternative under decision criteria

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Reference no: EM132968566

Real Estate Investment Company wants to make an investment decision the invest in one of the three investment areas (Apartment, Office, or Warehouse}. The deciston 1s subject to state of nature good economit condition with a probability of 60% and poor economic condition with a probability of 40%. The payoff table shown below

State of nature Decision Altematives Good Poor Apartment 50,000 30,000 Office 100,000 40,000 Warehouse 30,000 10,000

Required: Determine the best alternative under the following decision criteria

a) Expected Monetary Value (EMV)

b) Expected Oppertunity Loss (EOL)

Reference no: EM132968566

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