1. Develop a decision tree and identify the best decision.

2. If the consulting company identifies the market as negative what is the chance of a down and up market?

3. If the consulting company identifies the market as positive what is the chance of a down and up market?

4. What is the maximum amount Software Fragile is willing to pay the consulting company?

Software Fragile is an app developer company. The company produces customised efficiency applications for office usage. There are two main customers for their products including KMPG and Deloitte. Since KMPG and Deloitte are competitors, Software Fragile cannot approach both together and should choose one of them. Depending on the future market, KMPG and Deloitte can ask for the different number of customised efficiency applications. In the future, the market can go down or up leading to different amounts of purchases from KMPG and Deloitte. The profit associated with different scenarios is presented in the table below. Market Alternative Down Up KPMG 5 40 Deloitte 10 45 Probability 0.65 0.35 One of the Software Fragile executives knows a consulting company providing advice on market prospects. The consulting company claims when they identified the market as positive in 70% of cases it went up. When they identified the market as negative in 60% of cases it went down