Question: based on this information, I created the decision tree as below. Question 1: After Hugh Liedtke convinces the Decision Board to adjust the minimum payout

based on this information, I created the decision

based on this information, I created the decision tree as below.

based on this information, I created the decision

Question 1: After Hugh Liedtke convinces the Decision Board to adjust the minimum payout from the Court Case uncertainty from 0 to $2B, he also decides that an Influence Diagram might give the Decision Board a different perspective on the Texaco Pennzoil affair. Once completed (and reconciled with the associated Decision Tree), Liedtke considers retaining a law firm the would be able to give Pennzoil the most likely outcome of the court given the three provided. If Liedtke considered the invite it from the law firm "Perfect Information", how much would he be willing to pay for it before deciding to accept Texaco's offer of $3B? (Give your answer in Millions of dollars, accurate to three decimal points of accuracy.)

THE UNIVERSITY OF ARIZONA COLLEGE OF ENGINEERING . Systems & Industrial Pennzoil Alternatives Engineering Accept $2B Positive - Known quantity Negative - Below $3 - 5B that his advisors suggest Counteroffer $5B Texaco might accept Texaco could counter with $3B Texaco could reject and both return to court Reject $2B and return to court Assumption returning to court reduced to one of three outcomes for simplicity of analysis Judgment supports the $10.3 B award Judge awards $5B Judge rules in favor of Texaco ($0 to Pennzoil) . . . . . FALSE 0.0% Accept 2 2 Penn/Tex at to do with Texaco's offer 4.6348 17.0% 17.07 Accept $5B 5 5 TRUE Counter w SSB Texaco's Response 4.6348 0 10.0% Large Award 20.0% 10.3 10.3 50.0% Refuse Counter Court 4.56 0 50.0% 25.0% Medium Award 5 5 30.0% 15.0% No Award 0 0 20.0% 6.6% Large Award 10.3 10.3 TRUE Court Reject 0 4.56 50.0% 16.5% Medium Award 5 5 30.0% 9.9 No Award 0 0 33.0% Texaco's counter w $36 Reaction to Texaco's counter 4.56 0 Accept FALSE 0.0% 3 3 THE UNIVERSITY OF ARIZONA COLLEGE OF ENGINEERING . Systems & Industrial Pennzoil Alternatives Engineering Accept $2B Positive - Known quantity Negative - Below $3 - 5B that his advisors suggest Counteroffer $5B Texaco might accept Texaco could counter with $3B Texaco could reject and both return to court Reject $2B and return to court Assumption returning to court reduced to one of three outcomes for simplicity of analysis Judgment supports the $10.3 B award Judge awards $5B Judge rules in favor of Texaco ($0 to Pennzoil) . . . . . FALSE 0.0% Accept 2 2 Penn/Tex at to do with Texaco's offer 4.6348 17.0% 17.07 Accept $5B 5 5 TRUE Counter w SSB Texaco's Response 4.6348 0 10.0% Large Award 20.0% 10.3 10.3 50.0% Refuse Counter Court 4.56 0 50.0% 25.0% Medium Award 5 5 30.0% 15.0% No Award 0 0 20.0% 6.6% Large Award 10.3 10.3 TRUE Court Reject 0 4.56 50.0% 16.5% Medium Award 5 5 30.0% 9.9 No Award 0 0 33.0% Texaco's counter w $36 Reaction to Texaco's counter 4.56 0 Accept FALSE 0.0% 3 3

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