Solve the decision problem shown below. Assume an interest rate of 12%. Answer specifically what should...

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Solve the decision problem shown below. Assume an interest rate of 12%. Answer specifically what should be the decisions at nodes 1 and 2. Your decision should be based on the total profit earned regardless of the initial investment. You can either use Precision Tree or hand calculations. "p" represents the probability at a particular node. Total planning horizon is 7 years. Return $3,000/yr for 7 yrs 1 A B p = 0.6 Provide following answers in the box below: 1) EMV and decision at Node 2 2) EMV and decision at Node 1 p = 0.4 Return $3,000/yr for first 3 yrs and $5,000/yr for the last 4 years p=0.7 2 Return $4,500/yr for first 4 yrs and loss of $2,000/yr for last 3 years p = 0.3 Return $2,000/yr for 7 yrs Return $2,000/yr for 7 yrs, p= 0.2 Return $1,500/yr for 7 yrs, p= 0.5 Return $1,000/yr for 7 yrs, p=0.3 Solve the decision problem shown below. Assume an interest rate of 12%. Answer specifically what should be the decisions at nodes 1 and 2. Your decision should be based on the total profit earned regardless of the initial investment. You can either use Precision Tree or hand calculations. "p" represents the probability at a particular node. Total planning horizon is 7 years. Return $3,000/yr for 7 yrs 1 A B p = 0.6 Provide following answers in the box below: 1) EMV and decision at Node 2 2) EMV and decision at Node 1 p = 0.4 Return $3,000/yr for first 3 yrs and $5,000/yr for the last 4 years p=0.7 2 Return $4,500/yr for first 4 yrs and loss of $2,000/yr for last 3 years p = 0.3 Return $2,000/yr for 7 yrs Return $2,000/yr for 7 yrs, p= 0.2 Return $1,500/yr for 7 yrs, p= 0.5 Return $1,000/yr for 7 yrs, p=0.3