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A consulting firm has contacted your company claiming that their analysis conclusively indicates that the probability of the airport being built at location A is 0.50, the probability of the airport being built at location B is 0.30, and the probability of the airport being built at neither location A nor location B is 0.20 (i.e., they have perfect information regarding the probability of the airport being built at location A, location B or neither location A nor location B). The consultant has offered to share their analysis with your company for a fee of $25.0 million. What is the Expected Value of Perfect Information in this scenario?

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Statistics and Probability, Statistics

Category:- Statistics and Probability
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