Question: 1. Based on the below decision tree, what is the expected value (What is the value for the best decision alternative)? Success (0.15) 2098 Moderate
1. Based on the below decision tree, what is the expected value (What is the value for the best decision alternative)?
| Success (0.15) | 2098 |
| Moderate Success (0.4) | 2098 |
| Failure (0.45) | 2098 |
| Success (0.15) | 2500 |
| Moderate Success (0.4) | 3030 |
| Failure (0.45) | 1000 |
| Success (0.15) | 5000 |
| Moderate Success (0.4) | 3500 |
| Failure (0.45) | -909 |
2. Given high demand, what is the probability of a not improving economy?
| Improving Economy | Not improving economy | |
| Given high demand | 0.59 | |
| Given Low demand | 0.54 |
3. Our original information was that the probability of High demand was .6. We collected the following new information about what happened to demand when there was an improving or not improving economy. Answer the below question.
Calculate the probability for low demand and the improving economy?
| Improving Economy | Not improving economy | |
| Given high demand | 0.84 | |
| Given Low demand | 0.51 |
Decision alternative Sell Company Form Joint Venture Sell Software on own
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