The following information relate to Seven Tree Ltd, a company which is considering whether to develop...

 

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The following information relate to Seven Tree Ltd, a company which is considering whether to develop and market a product. probability Development Being successful Being unsuccessful Estimated development costs would be $180,000 if successful, the product will be marketed with the following probabilities: 0.75 0.25 Probabilities Profit/(loss) $540,000 Being successful Being moderately successful Being failure The above profit/loss figures include the effect of the development costs Required: Draw decision tree to illustrate the above problem and recommend the best course of action 0.4 0.3 $100,000 ($400,000) 0.3 The following information relate to Seven Tree Ltd, a company which is considering whether to develop and market a product. probability Development Being successful Being unsuccessful Estimated development costs would be $180,000 if successful, the product will be marketed with the following probabilities: 0.75 0.25 Probabilities Profit/(loss) $540,000 Being successful Being moderately successful Being failure The above profit/loss figures include the effect of the development costs Required: Draw decision tree to illustrate the above problem and recommend the best course of action 0.4 0.3 $100,000 ($400,000) 0.3

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As per the below image attached being successfull giv... View the full answer