The expected value with perfect information

A) equals EVPI - EMV.
B) requires that each decision alternative have a known probability of occurrence.
C) is an input into the calculation of the expected value of perfect information.
D) is the average of the maximax and the maximin.
E) none of the above.

The expected value with perfect information (EVwPI) is the expected value that would result if the decision maker had perfect information about the uncertain event. This means that the probability and outcome of each possible scenario are known with certainty. EVwPI is an input into the calculation of the expected value of perfect information (EVPI), which is the maximum amount a decision maker should be willing to pay for perfect information. EVPI equals the EVwPI minus the expected monetary value (EMV) of the decision without perfect information. Choice A is incorrect because EVPI is not equal to EVwPI minus EMV, but rather EVPI equals EVwPI minus EMV. Choice B is incorrect because it is possible to calculate EVwPI even if each decision alternative does not have a known probability of occurrence. Choice D is incorrect because the expected value with perfect information is not the average of the maximax and the maximin. Choice E is incorrect because answer C is correct.