Question: You're doing a prototype for your project, but you're not sure whether to proceed with this prototype. If you do the prototype, it will cost

You're doing a prototype for your project, but you're not sure whether to proceed with this prototype. If you do the prototype, it will cost you $100,000; and, of course, if you don't pursue it, there will be no cost. If you do the prototype, there is a 30 percent chance that the prototype might fail, and for that the cost impact will be $50,000. However, if the prototype succeeds, the project will make $500,000. If you do not do any prototype, you're already taking a risk, the chance of which is 80 percent with a failure impact of $250,000. But, again, without a prototype, should you succeed, the project will make the same money as mentioned before. Draw a decision tree for the problem, and answer the following questions

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