Question: 7. You are asked to choose between two projects A or B based on the highest gain (or the lowest loss). A will cost U.S.

7. You are asked to choose between two projects A or B based on the highest gain (or the lowest loss). A will cost U.S. $800,000 and B will cost U.S. $600,000. There is a 60% chance that project A will be successful, which will result in a gain of U.S. $2,000,000. If project A fails there will be a loss of U.S. $700,000. There is a 70% project B will be successful. If Project B fails there will be a loss of U.S. $800,000. Based on this information: a. Draw the decision tree of the projects. b. What is the minimum gain of project B in order to be a better option than project A

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