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Conditions: Poor Good Excellent Probability 40 % 50 % 10 %

Using Excel, calculate the expected value of each project and identify the preferred project according to this criterion.

Assume that the individual’ s utility function for profit is U( X) = X-0.05X2. Calculate the expected utility of each project and identify the preferred project according to this criterion.

Is this individual risk adverse, risk neutral, or risk seeking? Why?

Froeb et al.’ s Chapter 17: a) Individual problems: 17 – 1 and 17 – 4.

Individual Problem 17-1: You’ re the manager of global opportunities for a US manufacture, who is considering expanding sales into Europe. Your market research has

Conditions: Poor Good Excellent Probability 40 % 50 % 10 %

Using Excel, calculate the expected value of each project and identify the preferred project according to this criterion.

Assume that the individual’ s utility function for profit is U( X) = X-0.05X2. Calculate the expected utility of each project and identify the preferred project according to this criterion.

Is this individual risk adverse, risk neutral, or risk seeking? Why?

Froeb et al.’ s Chapter 17: a) Individual problems: 17 – 1 and 17 – 4.

Individual Problem 17-1: You’ re the manager of global opportunities for a US manufacture, who is considering expanding sales into Europe. Your market research has