Problem $2$: New Product Launch

Scenario: A company is deciding whether to launch a new product.

Launch Option: Cost: $$200,000$; High demand $(70\%)$: Return of $$500,000$; Low demand $(30\%)$: Return of $$50,000.$

Do Not Launch: No cost$,$ no return.

Task: Create a decision tree and determine the EMV of launching the product versus not launching it$.$ What recommendation can you make?

Problem $3$: Equipment Purchase

Scenario: An engineering firm must decide whether to buy new equipment.

Buy Equipment: Cost: $$250,000$; Cash inflow: $$100,000$ per year for $4$ years $($certainty$).$

Lease Equipment: Lease cost: $$60,000$ per year for $4$ years with a residual value of $$50,000.$

Task: Develop a decision tree and calculate the total costs for both options. Which option is more economically viable?