Required:
(iii) A firm of consultants has offered to undertake a study on behalf of Envico Ltd which will provide perfect
information regarding seminar attendance during the forthcoming year.
Advise the management of Envico Ltd with regard to the maximum amount that they should pay to
consultants for perfect information regarding seminar attendance and comment briefly on the use of
perfect information in such decisions. (5 marks)
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(iii) If attendance = 100 then management would opt for room size A which would produce a contribution of £832,000 x0·2 = £166,400.If attendance = 200 then management would opt for room size B which would produce a contribution of £2,163,200x 0·5 = £1,081
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(iii) If attendance = 100 then management would opt for room size A which would produce a contribution of £832,000 x0·2 = £166,400.If attendance = 200 then management would opt for room size B which would produce a contribution of £2,163,200x 0·5 = £1,081