Opportunity to purchase land currently zoned residential

Assignment Help Operation Management

Reference no: EM13845671

A real estate investor has the opportunity to purchase land currently zoned residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits (in thousands of dollars) are shown in the following payoff table:

State of Nature

Rezoning Approved Rezoning Not Approved

Decision Alternative S1 S2

Purchase,d1 600 -200

Do not purchase,d2 0 0

Suppose P(s1)=0.6 and P(s2)=0.4. Using the payoff table in the problem, calculate the following:

a) minimum expected payoff

b) maximum expected payoff

c) expected value with perfect information (EVwPI)

d) expected value of perfect information(EVPI)

Reference no: EM13845671

Questions Cloud

Identify a motif or leitmotif in the play : Identify a motif or leitmotif in the play: a repeated phrase, an object, or a stock situation. What does thismotif convey about important themes in the play, and/or about one of the characters

Was shift to free trade regime in the textile industry good : From an economic perspective, was the shift to a free trade regime in the textile industry good for Bangladesh? Economically who benefits when retailers in Europe and the United States source textiles from low-wage countries such as Bangladesh? Who m..

Calculate the density of the solid : The level of liquid kerosene rises from 8.5 ml to 15.3ml. Calculate the density of the solid and identity the compound from the following list.

Response surface encountered in modelling process behaviour : The contour plots in Figure 10.27 display four types of response surface encountered in modelling process behaviour. In the cases of the saddle and the stationary ridge, what recommendations would you make, given that the goal was to maximize the res..

Opportunity to purchase land currently zoned residential : A real estate investor has the opportunity to purchase land currently zoned residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount..

Total rate of electrical energy dissipation : Problem 1: Power. What is the total rate of electrical energy dissipation of the resistors in the given circuit?

On-line banking a competitive advantage : on-line banking a competitive advantage

Price is an important element of the marketing mix : Price is an important element of the marketing mix. Create a 300-400-word response and describe the importance of pricing in the marketing mix. Describe three different pricing strategies and provide a real-life example of each in action. Suggest ano..

Compare with the rate for flybynight better or worse : Flybynight Airlines measured their numbers of lost bags in one month and found that they had lost 130 bags for 10,000 customers. If the average number of bags per customer is 1.3, how many errors per million opportunities (epmo) does this represent? ..

User Account

All Pages