An investor is going to purchase one of three types of real estate The investor must decide among an apartment building an

Question

An investor is going to purchase one of three types of real estate The investor must decide among an apartment building an office building and a warehouse The future states of nature that will determine how much profit the investor will make are good economic conditions and poor economic conditions The profits in thousands that will result from each decision in the event of each state of nature are shown in the following table Decision Purchase Apartment building Office building Warehouse Decision Purchase a Construct Opportunity Loss Regret Table Apartment building Office building Warehouse Good Economic Conditions 550 1030 385 States of Nature States of Nature Good Economic Conditions Poor Economic Conditions 340 370 105 Poor Economic Conditions b Determine the best decision using the Opportunity Loss decision criterion O Decision Apartment building based on 480 min 480 710 645 O Decision Warehouse based on min 235 except zeros O Decision Office building based 710 max 480 710 645 O Decision Warehouse based on 880 max 480 710 880

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