Build a decision tree to help you decide if you want to purchase a new car or a used car. The biggest concern or risk with purchasing a used car is the potential need for repairs and not knowing about any previous problems the car might have had. There is a 40% chance that a used car will need to be repaired within a one-year period; however, there is a 90% chance that the new car will not need any repairs during the same period. The cost for a used car is $7,500, and the cost for a new car is $15,000.

1. Use the information in the table below to decide whether you should buy a used car versus a new car. Pick the decision with the lower investment required.
2. Create a decision tree to show outcomes for each decision node using the SilverDecisions websiteLinks to an external site.
3. Calculate the expected value of each outcome and show your calculations (Probability x Impact).
4. Export your decision tree as a .png file and save it on your computer.
5. Explain the best option based on the outcome and why.

Cost to buy a new car	$15,000
Cost to buy a used car	$7,500
Probability of not having any repairs within one year	90%
Probability of repairing a used car within one year	40%
Cost of repairs for a new car	$5,000
Cost of repairs for a used car	$9,000