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For the decision problem in Figure 6.1, use data tables to perform the following sensitivity analyses....

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Statistics

For the decision problem in Figure 6.1, use data tables toperform the following sensitivity analyses. The goal in each is tosee whether decision 1 continues to have the largest EMV. In eachpart, provide a brief explanation of the results.

a. Let the payoff from the best outcome, the value in cell A3,vary from $30,000 to $50,000 in increments of $2500.

b. Let the probability of the worst outcome for the firstdecision, the value in cell B5, vary from 0.7 to 0.9 in incrementsof 0.025, and use formulas in cells B3 and B4 to ensure that theyremain in the ratio 1 to 2 and the three probabilities for decision1 continue to sum to 1.

c. Use a two-way data table to let the inputs in parts a and bvary simultaneously over the indicated ranges.

Please provide solution as per Excel.

Decision 1Decision 2Decision 3
Payoff/CostProbabilityPayoff/CostProbabilityPayoff/CostProbability
$50,0000.1$5,0000.6$3,0001
$10,0000.2-$1,0000.4
-$5,0000.7
EMVEMVEMV

Answer & Explanation Solved by verified expert
4.3 Ratings (678 Votes)
The values areNow select the data in cells A9 to B18 Chose    See Answer
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