Bratt's Bed and Breakfast, in a small historic New England town, must decide how to subdivide (remodel) the large old home that will become an inn. There are three alternatives:
Option A would modernize all baths and combine rooms, leaving the inn with four suites, each suitable for two to four adults. The probability of high demand would be 50%, with a gross pay out of $90,000. Under low demand the payout is $30,000. The cost that needs to be considered in this option is $50,000.
Option B would modernize only the second floor; the results would be six suites, four for two to four adults, and two for two adults only. The probability of high demand is 40%, with a payout of $80,000. Under low demand, the payout is $15,750. To modernize the second floor, the cost would be $35,000.
Option C (the status quo option) leaves all walls intact. In this case, there are eight rooms available, but only two are suitable for four adults, and four rooms will not have private baths. The probability of high demand is 30%, with a payout of $25,500. Under low demand the fixed cost is $7,800. The cost for this option is $2,000 to cover normal expenses.
Required:
a. What is the EMV for option A?
b. What is the EMV for option B?
c. What is the EMV for option C?
d. Which option should Bratt's Bed and Breakfast choose?

Suppose that fizzo and pop hop are the only two firms that sell orange soda. the following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: pop hopadvertise doesn’t advertisefizzo advertise 10, 10 18, 2doesn’t advertise 2, 18 11, 11for example, the upper right cell shows that if fizzo advertises and pop hop doesn't advertise, fizzo will make a profit of $18 million, and pop hop will make a profit of $2 million. assume this is a simultaneous game and that fizzo and pop hop are both profit-maximizing firms. if fizzo decides to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise. if fizzo decides not to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise. if pop hop advertises, fizzo makes a higher profit if it chooses (not to advertise, to .if pop hop doesn't advertise, fizzo makes a higher profit if it chooses (not to advertise, to . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? fizzo will choose to advertise and pop hop will choose not to advertise. both firms will choose to advertise. fizzo will choose not to advertise and pop hop will choose to advertise. both firms will choose not to advertise. again, suppose that both firms start off not advertising. if the firms decide to collude, what strategies will they end up choosing? fizzo will choose not to advertise and pop hop will choose to advertise. both firms will choose not to advertise. fizzo will choose to advertise and pop hop will choose not to advertise. both firms will choose to advertise.