nick has plans to open some pizza restaurants but


Nick has plans to open some pizza restaurants, but he is not sure how many to open. He has prepared a payoff table to help analyze the situation. States of Nature Alternatives Good Market Fair Market Poor Market Open 1 380,000 70,000 -400,000 Open 2 200,000 80,000 -200,000 Do nothing 0 0 0 Nick believes there is a 40 percent chance that the market will be good, a 30 percent chance that it will be fair, and a 30 percent chance that it will be poor. A market research firm will analyze market conditions and will provide a perfect forecast (they provide a money back guarantee). What is the most that should be paid for this forecast?

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