Question: 2. Based on available information, a student develops a decision tree. | Payoff ($ millions) (.5) Large Market 5.0 Produce & Market (.5) Low Mkt.

2. Based on available information, a student

2. Based on available information, a student develops a decision tree. | Payoff ($ millions) (.5) Large Market 5.0 Produce & Market (.5) Low Mkt. -4.0 Develop (.5) Large Market Sell Idea 3.0 Product (-5) Low Mkt. -1.0 Lease for Royalty (.5) Large Market 2.0 Sell Idea Company A (-5) Low Mkt. -1.0 (-5) Large Market Company B 3.2 (-5) Low Mkt. -1.4 0.7 a) Calculate expected value at every node including the first node. Show work. b) What is the optimum decision and its expected value? c) If your risk tolerance is $0, what is the optimum decision and expected value

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