c) You are given the following pay-offs of three acts A1, A2 and A3, and the states of nature S1, S2 and S3. States of nature A1 A2 S1 25 -10 S2 400 440 S3 650 740 The probabilities of the states of nature are respectively, 0.1, 0.7 and 0.2. Calculate and tabulate the EMV and conclude which of the acts can be chosen as the best. A3 -125 400 750
c) You are given the following pay-offs of three acts A1, A2 and A3, and the states of nature S1, S2 and S3. States of nature A1 A2 S1 25 -10 S2 400 440 S3 650 740 The probabilities of the states of nature are respectively, 0.1, 0.7 and 0.2. Calculate and tabulate the EMV and conclude which of the acts can be chosen as the best. A3 -125 400 750
Chapter11: Venture Capital Valuation Methods
Section: Chapter Questions
Problem 14DQ
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