a. What decision should Lake Placid make using the expected value approach? b. C

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 worth trying to obtain additional information concerning which scenario is likely to occur?
c. Suppose the probability of the worst-case scenario increases to 0.2 the probability of the base-case scenario decreases to 0.5 and the probability of the best-case scenario remains at 0.3. What effect if any would these changes have on the decision
recommendation?
d. The consultant has suggested that an expenditure of $150000 on a promotional campaign over the planning horizon will effectively reduce the probability of the worst case scenario to zero. If the campaign can be expected to also increase the probabilityof the best-case scenario to 0.4 is it a good investment?