DECISION TREE ANALYSIS... YOU CAN USE A PEN AND PAPER, AND UPLOAD YOUR ANSWER. ALSO DRAW THE DECISION TREE 12.28 Jay Olsen, a writer of novels, just has com-pleted a new thriller novel. A movie company and aTV network both want exclusive rights to market hisnew title. If he signs with the network, he will receivea single lump sum of $900, but if he signs with themovie company, the amount he will receive dependson how successful the movie is at the box office. (AILS units are in thousands.)• TV Network: $900MovieEventSmall box Medium boxoffice (S) office (M)$1,000Large boxoffice (L)$3,200(a) Which option would you recommend basedon the expected monetary value (EMV) crite-rion? (Assume that he is a risk-neutral personinterested in maximizing the expected monetaryvalue.)(b) How much would he be willing to pay to knowthe true state of nature?(c) Jay can send his novel to a prominent moviecritic to assess the potential box office success.From his past experience, the movie critic's reli-ability of predicting the box office success is asfollows. Favorable prediction means that it ishighly likely the movie would be a box officesuccess. It will cost $20 to get his novel evalu-ated by the movie critic.PLEASE, ALSO DRAW A DECISION TREE, YOU CAN USE A PAPERAND PEN TO WRITE/DRAW, AND UPLOAD YOUR ANSWER

Expected monetary value (EMV) is a critical concept in decision theory and risk analysis, particularly in the fields of finance, project management, and decision-making under uncertainty. It quantifies the average financial outcome or value associated with a decision, taking into account both the potential outcomes and their respective probabilities.Expected Monetary value is a valuable tool for quantifying the financial consequences of different decisions under uncertainty. It provides a structured approach to evaluating options and select the one that, on average, is expected to yield the highest financial return.Expected monetary value (EMV) is a critical concept in decision theory and risk analysis, particularly in the fields of finance, project management, and decision-making under uncertainty. It quantifies the average financial outcome or value associated with a decision, taking into account both the potential outcomes and their respective probabilities.Expected Monetary value is a valuable tool for quantifying the financial consequences of different decisions under uncertainty. It provides a structured approach to evaluating options and select the one that, on average, is expected to yield the highest financial return.To determine the recommended option based on the expected monetary value(EMV) criterian , we need to calculate the EMV for both options.For the TV network:EMV (TV Network) = $900For the movie, Based on this, if Jay Olsen is risk-neutral and interested in maximizing the expected monetary value, he should sign with the movie company because it offers a higher expected payout.To determine how much Jay would be willing to pay to know the true state of nature, the difference in EMV between the two options is Jay would be willing to pay $95 to know the true state of nature.C)Jay can send his novel to the movie critic for evaluation. The cost of the evaluation is $20. To assess whether the evaluation is worth it, Jay should compare the potential benefit of the evaluation to its cost.The potential benefit is the difference in expected value between the movie company and the TV network, which is $95. If Jay believes that the movie critic's evaluation significantly improves the accuracy of predicting the movie's success and has a good chance of increasing the expected payout by more than $20, then it may be worthwhile to spend $20 for the evaluation.Jay should weigh the cost and potential benefit of the evaluation based on his confidence in the critic's reliability and the potential impact on this expected earning.A) Movie option would be recommended on the basis of expected monetary value.B) Jay would be willing to pay $95 to know the true state of nature.C) Jay should weigh the cost and potential benefit of the evaluation based on his confidence in the critic's reliability and the potential impact on this expected earning.