EVPI Problem Based on the following information The value of

EVPI Problem...

Based on the following information: The value of EVPI would be: $ 16,000 $ 18,000 $ 53,000 $ 39,000 None

Small plant: 0.3*70000+0.5*60000+0.2*10000 = 53000

Medium plant: 0.3*50000+0.5*40000+0.2*20000=39000

Large plant: 0.3*60000+0.5*50000-0.2*30000 = 49000

Therefore,

EMV = 53000

Now,

EV|PI = 0.3*70000+0.5*60000+0.2*20000

=55000

Therefore,

EVPI = EV|PI-EMV

=55000-53000 = $2000