Question

		Revenues
	Low (0.30)	Medium (0.50)	High (0.20)
A	120,000	255,000	390,000
B	130,000	295,000	460,000
C	100,000	300,000	480,000

Determine the maximum expected payoff.

Group of answer choices

$276,000

$285,000

$241,500

$278,500

Answer 1

	Revenues
	Low (0.30)	Medium (0.50)	High (0.20)	Expected Payoff
A	120,000	255,000	390,000	241,500
B	130,000	295,000	460,000	278,500
C	100,000	300,000	480,000	276,000

Expected payoff for A = (120000*0.30)+(255000*0.50)+(390000*0.20) = $241500.

Expected payoff for B = (130000*0.30)+(295000*0.50)+(460000*0.20) =$ 278500.

Expected payoff for A = (100000*0.30)+(300000*0.50)+(480000*0.20) = $276000.

Therefore, the maximum expected payoff is .$278,500. ( which is expected payoff for B)