I. Use the following information to answer multiple-choice Questions 1 to 10. A house developer has acquired rights to conduct surveys and tests in a particular area. The area is considered to have potential and it is believed that there is a 60% chance that tests would indicate a commercially viable development area. The cost of carrying out these tests will be lm. Whether the tests show the possibility of ultimate success (profitability) or not, or even if no tests are undertaken at all, the company could still pursue its building programme, or alternatively, it could sell its rights to another company through auction. However, if it carries out the surveys/tests, the probability of success is as follows: if 'successful tests have been carried out, the probability of a viable area is put at 0.65, whereas if the tests are a 'failure', the probability of a viable area is only 0.3. If no tests have been carried out the probability of a viable area is put at 0.45. The cost of build is estimated to be 15m and the revenue obtained from selling the properties is estimated to be 60m at today's prices. The revenue obtained from the sale of the rights will depend on the outcome of the tests (if carried out) and are as follows: Prior Test show "success" 18m Prior Test show 'failure 5m Without prior tests 10m Draw a decision tree for the above company, write down the revenues at the end of branches; and finally write the cost of decisions alongside each decision branch