Question No$.11.$

A company is deciding between two projects, A and B$.$ The decision tree has the following information:

$$ Project A:

$$ High demand: Probability $=0\mathrm{.}6,$ Profit $-$ $$100,000$

$$ Low demand: Probability $=0\mathrm{.}4,$ Profit $=$ $$20,000$

$$ Project B:

$$ High demand: Probability $=0\mathrm{.}7,$ Profit $-$ $$90,000$

$$ Low demand: Probability $=0\mathrm{.}3,$ Profit $=$ $$30,000$

Calculate the expected monetary value $($EMV$)$ for both projects and determine which project the company should choose.

$$ Project A with EMV $=$ $$68,000$

$$ Project B with EMV $-$ $$72,000$

$$ Project A with EMV $-$ $$64,000$

$$ Project B with EMV $=$ $$66,000$