Question: a) Calculate EV for every node. Show work. b) What is the optimum decision and EV? c) If your risk tolerance is $0, what is

a) Calculate EV for every node. Show work. b)

a) Calculate EV for every node. Show work.

b) What is the optimum decision and EV?

c) If your risk tolerance is $0, what is the best decision and EV?

*Please include the correct steps*

The tree has the following information. Payoff ($ millions) (.5) Large Market 12.0 Produce (.5) Low Mkt. -3.0 (.5) Large Market Develop Product Sell Idea 3.0 (.5) Low Mkt. 2.0 Lease for Royalty (.5) Large Market 2.0 Sell Idea Company A (.5) Low Mkt. 1.2 (.5) Large Market Company B 8.8 (.5) Low Mkt. -3.0 1.0

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