During the fall of 1972, I was an ambitious college student who was in the market to purchase a…
During the fall of 1972, I was an ambitious college student who was in the market to purchase a snow plow to earn some extra money. My first option was to purchase a 1964 International Scout with a manual snow plow. With this setup, I had to physically maneuver the snow plow in order to angle it to the left or right. My second option was to purchase a 1968 Ford truck with a hydraulic snow plow. This setup will allow me to maneuver all of the snow plow controls from inside the cab of the truck. The Ford option is more expensive but will allow me to plow snow faster. The payoffs depend on the number of inches of snow during the winter and are displayed in the following decision table along with the probabilities.
a. Choose the best vehicle to purchase using decision making under risk.
b. What is the most that I would be willing to pay for additional information?