ALL WORK MUST BE SHOWN
Consider a case where the management is facing with 3 options to choose from. The payoffs and probability associated with each of the scenario is also estimated and provided. Based on the information tabulated below, calculate the EVwPI (expected value with perfect information) and recommend what should be the maximum amount that the management should pay for the perfect information that can help them to make the best decision
State of Nature
Decision Aternative: Favourable Market Unfavorable market
Expensive system: 10000 -8000
Less expensive system : 8000 -4000
No system : 0 0
Probability : 0.4 0.6