Solve it by using decision tree analysis.

5. Avon cosmetics wishes to determine whether or not to make a new face powder. The

marketing manager may order a consumer testing program for 50,000. The present valueof all future profits for a successful product is P1,000,000. The brands failure will result ina net loss of P500,000. Not marketing the face powder will not affect the profit. Themanager judges that the face powder would have 60% chance of success without testing.

Customer testing will either be favorable (60%) or unfavorable. Given a favorable result,

the chance of product success is judged to be 75%. But for unfavorable test result, the

face powder's probability is judged to be 40%. Construct a decision tree diagram. Should

Avon cosmetics push the approach? Explain why?

6. Myra, a casual employee, is not feeling well due to severe cold. She has to decide

whether to report for work or to stay home and rest. If she goes to work, there is 40%

chance of getting sick ad spending P200 for medicine. If she stays at home, P120 will be

deducted from her salary for her absence. Should she go to work or rest? Please explain.