Answer:
- A. EMV with perfect information - EMV without any information
- C. 396 ±24.9793
Explanation:
You want the definition of EVPI, and the 95% confidence interval for a sample of 64 with µX = 396 and S=100.
1. EVPI
The expected value of perfect information will be the difference in values with perfect information and without any information:
EVPI = EMV|(perfect information) - EMV|(no information) . . . choice A
2. 95% confidence
The 95% confidence interval is ...
µX ± 1.99834·S/√n
396 ± 1.99834(100/√64) = 396 ± 24.9793
The mean number of admissions is about 396 ± 24.9793.
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Additional comment
The multiplier of S/√n is the upper (1 -0.95)/2 critical value for the t-distribution with n-1 degrees of freedom. This value is used because the population standard deviation is presumed to be unknown.
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