Question: Mini Case 4 - Strategy (10/50 Points) Given the following decision tree for a two-stage (decision) project to enter a joint venture, find the best

Mini Case 4 - Strategy (10/50 Points) Given the following decision tree for a two-stage (decision) project to enter a joint venture, find the best alternatives (among al-a6 in the figure) and their expected values. The outcomes shown are revenues and the investment expenses are in parentheses. Node 4 represents the situation where alternative al was chosen, and then the top outcome with a 70 percent probability occurred; note that there is no choice of alternative if the 30 percent probability outcome occurred. Similarly with Node 5. Revenue 3 07 Invest 4 1.300 2 500 Question 1 (5 Points): Which is the best alternative? 2000 02 500 03 Question 2 (5 Points): What is the least favorable alternative? 5 24 05 3.500 3 2 3.000 06 2 11
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