Question: Develop Product Sell Idea Sell Idea 5.0 -1.0 2.0 1.0 2.2 1.2 1.9 1.3 1.0 (.5) Large Market (.5) Low Mkt. (.5) Large Market (.5)

Develop

Product

Sell Idea

5.0

-1.0

2.0

1.0

2.2

1.2

1.9

1.3

1.0

(.5) Large Market

(.5) Low Mkt.

(.5) Large Market

(.5) Low Mkt.

Company A

Company B

(.5) Large Market

(.5) Low Mkt.

(.5) Large Market

(.5) Low Mkt.

Produce &

Market

Lease for Royalty

Payoff

($ millions)

1-a. Calculate the expected value for every node (7 of them). Show work.

EV1=

EV2=

EV3=

EV4=

EV5=

EV6=

EV7=

1-b. What is the optimum decision and Expected Value (EV)?

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