Question: Please answer completely and correctly all questions thanks 10. Decision tree with multiple decision points Purple Whale Inc. Co. is planning to add a new
Please answer completely and correctly all questions thanks

10. Decision tree with multiple decision points Purple Whale Inc. Co. is planning to add a new product line to make iBooks. However, Purple Whale Inc. is considering the possibility of abandoning the project f the demand for the new product is low. In the following decision tree table, (1), (2) and (3) represent decision points, also known as decision nodes or stages. The dollar value to the right of each decision node represents the net cash flow at that to completion. r point, and the cash flows shown under t-3, 4, and 5 represent the cash inflows if the project is pushed on If Purple Whale Inc. Co. decides to launch the new line for Books at Stage (1), then it will spend $60,000 on the marketing study. If the marketing study yields positive results, then the firm wil spend $200,000 an the prototype. It the prototype works well, then the firm will spend several milions more at Stage (3) to build a production plant. Suppose that as an analyst at Purple Whale Inc you have to analyze sequential decisions. By studying the following decision tree, you learm which of the following? Check al that apply. There is a 10% probability that investment n aproduction plant will yield badreses If the project iscanceled after Stage (1), Purple Whale Inc.'s costs will be$10,269,000. There is a 55% probability of the plot project yielding good results. There is a 95% probability of the plot project yieldng good results. Complete the decision tree table by calculating the net present values (NPVS) and joint probabilities, as well as products of joint each decio' branch. Assume functions or a financial calculator for this task. Round the NPVs to the nearest dollar and that the weighted average cost of capital (WACC) is 9% for all decision branches Hint: Use either a spreadsheet remember to enter the minus sign if a value is negative. Note: All cash amounts in the following table are in thousands of dollars. Step 0 Step 1 Step 2 Step 3 1st Invest Prob 2nd Invest Prob 3rd Invest Inflow Step 4Step S Inflow Inflow NPV (S) Joint Prob (%) NPV x Joint Prob ($) (2) 55% (2) 35% 10% -$10,269 -$10,000 stop $0 (3)$4,761 (3) S1.900 (3) SO s0 $8,237 $20,065 $200 $2,345 $7,800 (1)-460 Stop Expected NpV = on your calcuations, in case Purple whale Iac sbandons the new project right after the marketing study, the loss is
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