RECOMMENDATION AS TO WHETHER OCEANVIEW SHOULD EMPLOY THE MARKET RESEARCH FIRM Ocean view can use the Expected

Value of Sample Information (EVSI) to decide if they should employ the market research firm. This value can be calculated by finding the difference between the Expected Value without Sample Information from the Expected Value with Sample Information (EVwSI - EVwoSI).

EVwSI = EV2
= (0.41

x 229,250) + (0.59 x 0)

= $93,992.50

EVwoSI = EV5 = $50,000

EVSI = EVwSI - EVwoSI = 93,992.50 50,000 = $43,992.50 Calculations shows that conducting the market research study provides an additional $43,992.50 to the expected value of the profits. This value is also the maximum amount that Oceanview should be willing to pay for the market research. Since Oceanview is able to get the research done at a lower price of $15,000, they should employ the market research firm to conduct the survey.