Question: Do quickly. QUESTION 1 Enido Ltd is an Estate Developer. The company's turnover over the years is high until recently when estate business went down.

Do quickly.

Do quickly. QUESTION 1 Enido Ltd is an Estate

QUESTION 1 Enido Ltd is an Estate Developer. The company's turnover over the years is high until recently when estate business went down. The company is considering improving on its estate business operations or going into a transport business. Expectations are that there is an equal chance of transport business showing a 'success'. Whether the transport business becomes a success or otherwise, the company can earn an amount of Gh15 million. There is however a 60:40 chance of improving estate business operations showing a success. When estate operations become inevitable the company may take up a contract with KB Housing Ltd or alternatively merge with another consultancy firm. A contract with KB Housing Ltd gives a yield of Gh25m and the amalgamation will give a return of Gh28m in present value terms. When estate operations fail, the company may lose up to Gh10 million. NB: Initially, improving on estate operations and the transport business would cost the firm Gh0.8m and Gh6m respectively. Required: a. Draw the Project Decision Tree (PDT) b. Evaluate the PDT above and advice the management of Enido Ltd accordingly QUESTION 1 Enido Ltd is an Estate Developer. The company's turnover over the years is high until recently when estate business went down. The company is considering improving on its estate business operations or going into a transport business. Expectations are that there is an equal chance of transport business showing a 'success'. Whether the transport business becomes a success or otherwise, the company can earn an amount of Gh15 million. There is however a 60:40 chance of improving estate business operations showing a success. When estate operations become inevitable the company may take up a contract with KB Housing Ltd or alternatively merge with another consultancy firm. A contract with KB Housing Ltd gives a yield of Gh25m and the amalgamation will give a return of Gh28m in present value terms. When estate operations fail, the company may lose up to Gh10 million. NB: Initially, improving on estate operations and the transport business would cost the firm Gh0.8m and Gh6m respectively. Required: a. Draw the Project Decision Tree (PDT) b. Evaluate the PDT above and advice the management of Enido Ltd accordingly

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