Which is the best choice and what is its value

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Problem

A decision maker's utility curve is U(x) = 10,000 (1 - e^-x/10'000). Option A has a 50/50 chance of producing profits of -$5,000 and $10,000. Option B is the do-nothing alternative. Which is the best choice and what is its value?

Reference no: EM131959424

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