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a. What decision should Lake Placid make using the expected value approach?
a. What decision should Lake Placid make using the expected value approach?b. Compute the expected value of perfect information. Do you think it would be worthtrying to obtain additional information concerning which scenario is likely to occur?c. Suppose the probability of the worst-case scenario increases to .2, the probability of thebase-case scenario decreases to .5, and the probability of the best-case scenario remainsat .3. What effect, if any, would these changes have on the decision recommendation?d. The consultant suggested that an expenditure of $150,000 on a promotional campaignover the planning horizon will effectively reduce the probability of the worst-casescenario to zero. If the campaign can be expected to also increase the probability ofthe best-case scenario to .4, is it a good investment?
