Determine the probability that the following tree reflecting demand for a product, given an expense of acquiring the necessary equipment of $100k, has a rate of return higher than 30% per year.

A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Determine the probability that the following tree reflecting demand for a product, given an expense of acquiring the necessary equipment of $100k, has a rate of return higher than 30% per year.   

Sales: $27k/yr
4 ya
Decide
Sales: $26k per year with a $35k overhaul in yr 4
Low demapd p=0.35
$100k acquisition cost
High demand p=0.65
Sales $4SK/I
10 s
Decide
12 yrS
Sales $35k per year with a $35k overhaul in yr 6
Transcribed Image Text:Sales: $27k/yr 4 ya Decide Sales: $26k per year with a $35k overhaul in yr 4 Low demapd p=0.35 $100k acquisition cost High demand p=0.65 Sales $4SK/I 10 s Decide 12 yrS Sales $35k per year with a $35k overhaul in yr 6
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