Which location should be chosen for build the plant

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Public service Indiana (PSI) is considering two sites fora nuclear power plant. The following two attributes willinfluence its determination about where to build the plant:

Attribute 1 Cost of the plant (in millions of dollars) Attribute 2 Acres of land damaged by building the plant Assume that PSI's multiattribute utility function is given by u1(x1, x2)  .70u1(x1) .20u2(x2) .10u1(x1)u2(x2), whereu1(x1)  .1 exp(.1x1) and u2(x2)  2.5  2.5 exp (.0006x2  .48). Two locations for the power plant are under consideration. Location 1 is equivalent to the following lottery: .80 (0, 100%) .20 (30, 0%) .50 (50, 300) .50 (30, 400) .50 (60, 200) .50 (15, 600) 12 12A BL1 and L212 12C Dand location 2 is equivalent to the following lottery: Which location should be chosen?

Reference no: EM13844694

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