Construct an influence diagram for profit in the single-period purchase decision (News vendor Model Note) discussed in this chapter. Use Excel?s Formula Auditing capability to demonstrate the relationship between the spreadsheet model and the influence diagram.

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Housing Affordability Total Monthly Gross Income Allowable Monthly Housing Expenditure Total Non-Mortgage Housing Expenses Affordable Monthly Mortgage Payment Monthly Installment Debt Total Affordable Monthly Debt Payments Affordable Monthly Mortgage Monthly Payment per $1000 mortgage Maximum that can be borrowed Down Payment What one can afford to spend on a house $6,500.00 $350.00 $500.00 $0.00 $7.25 20% Max Percentage 28% Max Percentage 36% Housing Affordability Total Monthly Gross Income Allowable Monthly Housing Expenditure Total Non-Mortgage Housing Expenses Affordable Monthly Mortgage Payment Monthly Installment Debt Total Affordable Monthly Debt Payments Affordable Monthly Mortgage Monthly Payment per $1000 mortgage Maximum that can be borrowed Down Payment What one can afford to spend on a house $6,500.00 $350.00 $500.00 $0.00 $7.25 20% Max Percentage 28% Max Percentage 36%

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