(Answered) Question - an investor is to purchase one of three types of

Accounting

Question - An investor is to purchase one of three types of real estate. The investor must decide among an apartment building, an office building, and a warehouse. The future states of nature that will determine how much profit the investor will make are good economic conditions and poor economic conditions. The profits that will result from each decision in the event of each state of nature are shown above.

Payoff Table

	Good Economic Conditions	Poor Economic Conditions
Decision (Purchase)	50%	50%
Apartment building	$65,000	$30,000
Office building	100,000	-40,000
Warehouse	30,000	10,000

Which investment has the highest EMV?

What is the expected value of perfect information in this problem?

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