Business, 02.04.2021 18:30 darnellgee298

The Mineco company owns a piece of land that may have a significant amount of recoverable rare-earth element ore. If the land has ore and Mineco digs a mine they will make $1,000,000 profit. If the land does not have ore and Mineco digs a mine they will lose $500,000. Alternatively, the land could be sold for $400,000. A geologist has estimated that there is a 65% chance that the land contains ore. Required:
a. State of Nature Alternative Prior Probability.
b. Under the maximin decision criterion what should Mineco do?
c. Under the maximum likelihood criterion what should Mineco do?
d. If Mineco is using Bayes decision rule,, what is the Expected Value of Perfect Information for this problem?

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