At a decision point in a decision tree, which machine would you select when tryi

Question

At a decision point in a decision tree, which machine would you select when trying to maximize payoff when the anticipated benefit of selecting machine A is $45,000 with a probability of 90%; the expected benefit of selecting machine B is $80,000 with a probability of 50% and the expected benefit of selecting machine C is $60,000 with a probability of 75%? (Points : 5) Machine A Machine B Machine C You would be indifferent between machines A and C You would be indifferent between machines A and B

Explanation / Answer

Expected benefit from Machine A = 45000*90%=$40500 Expected benefit from Machine B = 80000*50%=$40000 Expected benefit from Machine C = 60000*75%=$45000 Answer - Machine C

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