Exercise 2 Given the following financing project being considered by a venture firm, find the probability of completing the path with the longest expected duration by 17 weeks. By 24 weeks. By what date is management 90 percent sure that this path will be completed? Most likely Pessimistic 1-2 1-3 Time (weeks) Optimistic 5 12 2 9 12 14 10 5 8 1 7 Activity Collect firm data Analyze data 1-4 Determine need 2-6 Determine profitability 3-6 Evaluate risk Interview owners 3-5 Check references 4-5 Evaluate industry 5-7 Evaluate economy 6-7 Decide funding 13 10 4 4 3-7 4 7 10 2 2 2 0 6 6 17 8 1 8 4 7 If the venture firm can complete the project for the customer within 18 weeks, it will receive a bonus of $10,000. But if the project delays beyond 22 weeks, it must pay a penalty of $3,000 due to lost opportunity. If the firm can choose whether to bid on this project, what should its decision be if the project is only a breakeven one normally? 2 End Start OF