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A local real estate investor in Orlando is considering three alternative investments: a motel, a restaurant, or a theater. Profits from the motel or restaurant will be affected by the availability of gasoline and the number of tourists; profits from the theater will be relatively stable under any conditions. The following payoff table shows the profit or loss that could result from each investment:

Gasoline Availability

Investment Shortage Stable Supply Surplus

Motel $_8,000 $15,000 $20,000

Restaurant 2,000 8,000 6,000

Theater 6,000 6,000 5,000

Determine the best investment, using the following decision criteria.

a. Maximax

b. Maximin

c. Minimax regret

d. Hurwicz

e. Equal likelihood

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9791370

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