a) As a consultant, explain to the construction manager the benefits of using a decision tree to
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Question:
a) As a consultant, explain to the construction manager the benefits of using a decision tree to determine EMV.
b) Based on this scenario (draw a decision tree with EMV), state your recommendation to the construction manager.
A construction manager wanted to evaluate the options for a project objectively based on the expected monetary value (EMV). The company can either expand at site A (RM6 million construction cost) OR site B (RM10 million construction cost) - Project A has favourable outcome 60% with RM15 million estimated profit and unfavourable 40% chance of RM2 million estimated profit. - Project B has a favorable outcome of 70% RM30 million estimated profit and unfavourable 30% chance of RM6 million estimated profit.
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