Develop a decision tree (w/o using PrecisionTree) that can be used to solve Evas problem. You can assume in this part of the problem that she is using EMV (of her net profit) as a decision criterion. Build the tree so that she can enter any values for , , and (in input cell) and automatically see her optimal EMV and optimal strategy from the tree.

(2) If and , what value of makes Eva indifferent between abandoning the project and going ahead with it?

(3) How much would Eva benefit if she knew for certain that Mercy would guarantee her the contract? (This guarantee would be in force only if she were successful in developing the system.) Assume , , and .

(4) Suppose now that this is relatively big project for Eva. Therefore, she decides to use expected utility as her criterion, with an exponential utility function. Using some trial and error, see which risk tolerance changes her initial decision from go ahead to abandon when , , and .

Finally, if Eva wins the contract, the finished product will cost an additional $150,000 to produce. With Question 5.xlsx,

Deciding whether to develop an EHR system for Merey Input parameters R&D cost Prototyping cost Production cost Revenue from contract Probabilities Successful development pl Winning contract if success p2 Winning contract il failure p3