please explain it.

9. Decision tree with multiple decision points Purple Turtle Group Co. is planning to add a new product line to make Widgets. However, Purple Turtle Group is considering the possibility of abandoning the project if 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 point, and the cash flows shown under t - 3, 4, and 5 represent the cash inflows if the project is pushed on to completion U Purple Turtle Group Co. decides to launch the new line for Widgets at Stage (1), then it will spend 560,000 on the marketing study, If the marketing study yields positive results, then the firm will spend $200,000 on the prototype. If the prototype works well, then the firm will spend several millions more at Stage (3) to build a production plant. Suppose that as an analyst at Purple Turtle Group you have to analyze sequential decisions, by studying the following decision tree, you learn which of the following? Check all that apply. There is a 10% probability that investment in a production plant will yield bad results There is a 95% probability of the pilot project yielding good results, There is a 55% probability of the plot project yieiding yood results. If the project is canceled after Stape (1), Purple Tutle Group's costs will be $10,209,000 Complete the decision tree table by calculating the net present values (NPV) and joint probabilities, as well as products of joint probabilities and NPV for each decision branch. Assume that the weighted average cost of capital (WACC) IS 9 for all decision branches, Hint: Use either a spreadsheet program's functions or a financial Calculator for this task. Round the NPs to the nearest dollar and remember to enter the minus sign if a value is negative U There is a 95% probability of the pilot project yleiding good results. There is a 55% probability of the pilot project yielding good results. DIf the project is canceled after Stage (1), Purple Turtle Group's costs will be $10,269,000. Complete the decision tree table by calculating the net present values (NPV) and joint probabilities, as well as products of joint probabilities and NPVS for each decision branch. Assume that the weighted average cost of capital (WACC) is 9 for all decision branches. Hint: Use either a spreadsheet program's functions or a financial calculator for this task. Round the NPUs to the nearest dollar and remember to enter the minus sign it a value is negative. Note: All cash amounts in the following table are in thousands of dollars. Step 1 Step 2 Step 4 Step 3 Step 5 2nd Invest Prob NPV (s) 13,666 Joint Prob (9) 52.25 NPV x Joint Prob (9) 58,232 7.140 Prob (2) 55% (2) 35% (2) 10% 95% -$200 3rd Invest --$10,269 -510,000 Stop 30 Inflow (3) 14,761 (3) $1,900 (3) 50 $0 $2,345 $20,065 $7,800 50 10 50 SO 1,11 ... 59 Stop Expected NPV Based on your calculations, you recommend that Purple Turtle Group If the project is canceled after Stage (1), Purple Turtle Group's costs will be $10,269,000. Complete the decision tree table by calculating the net present values (NPVS) and joint probabilities, as well as products of joint probabilities and NPVS for each decision branch. Assume that the weighted average cost of capital (WACC) is 9% for all decision branches. Hint: Use either a spreadsheet program's functions or a financial calculator for this task. Round the NPVs to the nearest dollar and remember to enter the minus sign it a value is negative Note: All cash amounts in the following table are in thousands of dollars. Step 4 Step 3 Step 5 NPV x Joint Prob Step 1 Step 2 2nd Prob Invest Prob (2) 55% 95% - $200 (2) 35% (2) 10% 5% Stop NPV (5) 13,666 Joint Prob (%) $8,237 $20.065 52.25 7,140 3rd Invest -$10.269 -$10,000 Stop 50 Inflow (3) $4,761 (3) $1,900 (3) $0 $0 discontinues all old products and switches to Widgets delays the new project accepts the new project rejects the new project Based on your calculations, you recommend that Purple Turtle Group 9. Decision tree with multiple decision points Purple Turtle Group Co. is planning to add a new product line to make Widgets. However, Purple Turtle Group is considering the possibility of abandoning the project if 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 point, and the cash flows shown under t - 3, 4, and 5 represent the cash inflows if the project is pushed on to completion U Purple Turtle Group Co. decides to launch the new line for Widgets at Stage (1), then it will spend 560,000 on the marketing study, If the marketing study yields positive results, then the firm will spend $200,000 on the prototype. If the prototype works well, then the firm will spend several millions more at Stage (3) to build a production plant. Suppose that as an analyst at Purple Turtle Group you have to analyze sequential decisions, by studying the following decision tree, you learn which of the following? Check all that apply. There is a 10% probability that investment in a production plant will yield bad results There is a 95% probability of the pilot project yielding good results, There is a 55% probability of the plot project yieiding yood results. If the project is canceled after Stape (1), Purple Tutle Group's costs will be $10,209,000 Complete the decision tree table by calculating the net present values (NPV) and joint probabilities, as well as products of joint probabilities and NPV for each decision branch. Assume that the weighted average cost of capital (WACC) IS 9 for all decision branches, Hint: Use either a spreadsheet program's functions or a financial Calculator for this task. Round the NPs to the nearest dollar and remember to enter the minus sign if a value is negative U There is a 95% probability of the pilot project yleiding good results. There is a 55% probability of the pilot project yielding good results. DIf the project is canceled after Stage (1), Purple Turtle Group's costs will be $10,269,000. Complete the decision tree table by calculating the net present values (NPV) and joint probabilities, as well as products of joint probabilities and NPVS for each decision branch. Assume that the weighted average cost of capital (WACC) is 9 for all decision branches. Hint: Use either a spreadsheet program's functions or a financial calculator for this task. Round the NPUs to the nearest dollar and remember to enter the minus sign it a value is negative. Note: All cash amounts in the following table are in thousands of dollars. Step 1 Step 2 Step 4 Step 3 Step 5 2nd Invest Prob NPV (s) 13,666 Joint Prob (9) 52.25 NPV x Joint Prob (9) 58,232 7.140 Prob (2) 55% (2) 35% (2) 10% 95% -$200 3rd Invest --$10,269 -510,000 Stop 30 Inflow (3) 14,761 (3) $1,900 (3) 50 $0 $2,345 $20,065 $7,800 50 10 50 SO 1,11 ... 59 Stop Expected NPV Based on your calculations, you recommend that Purple Turtle Group If the project is canceled after Stage (1), Purple Turtle Group's costs will be $10,269,000. Complete the decision tree table by calculating the net present values (NPVS) and joint probabilities, as well as products of joint probabilities and NPVS for each decision branch. Assume that the weighted average cost of capital (WACC) is 9% for all decision branches. Hint: Use either a spreadsheet program's functions or a financial calculator for this task. Round the NPVs to the nearest dollar and remember to enter the minus sign it a value is negative Note: All cash amounts in the following table are in thousands of dollars. Step 4 Step 3 Step 5 NPV x Joint Prob Step 1 Step 2 2nd Prob Invest Prob (2) 55% 95% - $200 (2) 35% (2) 10% 5% Stop NPV (5) 13,666 Joint Prob (%) $8,237 $20.065 52.25 7,140 3rd Invest -$10.269 -$10,000 Stop 50 Inflow (3) $4,761 (3) $1,900 (3) $0 $0 discontinues all old products and switches to Widgets delays the new project accepts the new project rejects the new project Based on your calculations, you recommend that Purple Turtle Group