In the following decision tree model, 1 Continue R&D Stop R&D Prototype Successful (0.75) 2 -$350K...

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In the following decision tree model, 1 Continue R&D Stop R&D Prototype Successful (0.75) 2 -$350K Manufacture in house 3 Prototype failure (0.25) Sell the Technology -$450K 4 High Demand (0.6) Low Demand (0.4) $Payoff3 $ payoff1 $Payoff2 payoff1 = $3,718,000, payoff2=$520,000, payoff3 = $1,967,000. What is the expected payoff of node 2? Please enter complete value, e.g. 123000 instead of 123K. In the following decision tree model, 1 Continue R&D Stop R&D Prototype Successful (0.75) 2 -$350K Manufacture in house 3 Prototype failure (0.25) Sell the Technology -$450K 4 High Demand (0.6) Low Demand (0.4) $Payoff3 $ payoff1 $Payoff2 payoff1 = $3,718,000, payoff2=$520,000, payoff3 = $1,967,000. What is the expected payoff of node 2? Please enter complete value, e.g. 123000 instead of 123K.

Answer rating: 100% (QA)

Let x be the probability of success when we build the prototype and y be the probabil... View the full answer