What is your expected utility if you reach your sales goal

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Suppose you are in sales and your utility function is U(I) = I1/2. a.If you meet your sales goal for the month, you earn $4,900 and $3,600 if not. What is your expected utility if you reach your sales goal 50% of the time? b.Suppose the sales goal was lowered so that you meet it 60% of the time. Now, what is your expected utility? c.Instead of lowering the goal, suppose the compensation from meeting the goal was increased by $2,500. Would you prefer the lower goal or the higher payment? d.Instead of lowering the goal, suppose the compensation from failing to meet the goal was increased by $2,500. Would you prefer the lower goal or the higher payment?

Reference no: EM13149406

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