Question: 2. A company has 2 initial options: spend extra $2m for more research on a product development project or stop project. Project's chance of success

2. A company has 2 initial options: spend extra $2m for more research on a product development project or stop project. Project's chance of success 70%. If project is successful, 2 new options: license the technology to another company for $25m or spend 10m to sell the product directly. Sell directly: high demand (25% chance) & profit - $55m. Med. demand (55% chance) & profit = $33m, or Low demand (20% chance) & profit = $15m. Construct a decision tree for this problem. 2. A company has 2 initial options: spend extra $2m for more research on a product development project or stop project. Project's chance of success 70%. If project is successful, 2 new options: license the technology to another company for $25m or spend 10m to sell the product directly. Sell directly: high demand (25% chance) & profit - $55m. Med. demand (55% chance) & profit = $33m, or Low demand (20% chance) & profit = $15m. Construct a decision tree for this

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