Question: A company is deciding if it should design an advertising system for use on Twitter. The first option is to skip out on designing, with

A company is deciding if it should design an advertising system for use on Twitter©. The first option is to skip out on designing, with no net costs or gains. The second option is System A, which would result in additional sales of either $50,000 under good conditions or $10,000 under bad conditions. The final choice is System B, which would increase sales by $20,000 under both good and bad conditions. Suppose that good conditions are twice as likely as bad conditions. Which option should the company pursue if developing a system costs $25,000? (14 marks – 7 for drawing decision tree, 7 marks for EMV calculation and correct suggestion of what to do)r

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