Alexander Industries is considering purchasing an insurance policy for its new office building in St. Louis, Missouri. The policy has an annual cost of $30,000. If Alexander Industries does not purchase the insurance and minor fire damage occurs, a cost of $200,000 is anticipated; the cost if major or total destruction is $300,000. The costs, including the state-of-nature probabilities, are:
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Damage
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Decision Alternative
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None, s1
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Minor, s2
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Major, s3
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Purchase insurance, d1
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30,000
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30,000
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30,000
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