# BUS522 Unit 7 Assignment Latest 2022 September

Question # 00830532 Posted By: solutionshare7 Updated on: 09/04/2022 10:10 AM Due on: 09/04/2022
Question

BUS522 Financial Tools for Managers

Unit 7 Assignment

Steve’s Mountain Bicycle Shop

Steve’s Mountain Bicycle Shop is considering three options for its facility next year. Steve can expand his current shop, move to a larger facility, or make no change. With a good market, the annual payoff would be \$76,000 if he expands, \$90,000 if he moves, and \$40,000 if he does nothing. With an average market, his payoffs will be \$30,000,

\$41,000, and \$15,000, respectively. With a poor market, his payoff will be –\$17,000, –

\$28,000, and \$4,000, respectively. This assignment will explore Maximax, Minimax, and Maximin using this scenario for Steve’s Mountain Bicycle Shop.

Instructions:

•             Create an Excel Document that shows which options Steve should pick in each of the below situations:

o             Maximax,

o             Maximin,

o             Equally likely,

o             Option if Steve uses criterion of realism at α = 0.4 (Hurwicz),

o             Minimax

•             The table(s) should be clearly presented and labeled. It should include information on the possible outcomes as well as the best choice in each of the above listed.

•             You may be creative in the presentation, so test your formatting skills!

Requirements:

•             Microsoft Excel file

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