Business, 17.01.2020 19:31, completed7
The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. she feels that script #1 has a 70% chance of earning $100 million over the long run, but a 30% chance of losing $20 million. if this movie is successful, then a sequel could also be produced, with an 80% chance of earning $50 million, but a 20% chance of losing $10 million. on the other hand, she feels that script #2 has a 60 % chance of earning $120 million, but a 40% chance of losing $30 million. if successful, its sequel would have a 50% chance of earning $80 million and a 50% chance of losing $40 million. as with the first script, if the original movie is a "flop", then no sequel would be produced.1. what is the expected payoff from selecting script #1? a. $150 million. b. $90.6 million. c. $84 million. d. $72 million. e. $60 million.2. what is the expected payoff from selecting script #2? a. $150 million. b. $90.6 million. c. $84 million. d. $72 million. e. $60 million.3. what is the expected payoff for the optimum decision alternative? a. $150 million. b. $90.6 million. c. $84 million. d. $72 million. e. $60 million.
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