George Burdell must decide among four alternatives for an oil exploration project. He estimates that the probability of high demand is 0.8. What is the best choice with the payoffs shown in the decision tree below? First, be sure to infer the missing probabilities.
 

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High Demand Low Demand $800 $700 $500 High Demand 3 Low Dernand $900 Alternative B $700 $250 1 Alternative C High Demand 4 Low Demand $600 $650 $650 High Demand 5 Low Demand $200 $300 $900 Alternative A Alternative D High Demand Low Demand $800 $700 $500 High Demand 3 Low Dernand $900 Alternative B $700 $250 1 Alternative C High Demand 4 Low Demand $600 $650 $650 High Demand 5 Low Demand $200 $300 $900 Alternative A Alternative D

Answer rating: 100% (QA)

HD 08 700 LDO2 S00 HDO3 49 00 700 LDO28 250 bltc 2600 alt HDOR 200 300 ... View the full answer