Giving the following decision treewhat is the best expected valuefor the best decision *Low demand [0.70]$70,000Do not expand$90,000Small expansionLarge expansionHigh demand (0.30]Expand$135,000Low demand (0.70]$40,000High demand [0.30]$220,000

The EV(expected value) is an expected incentive for a demand sooner or later. In insights and…

Giving the following decision tree what is the best expected value for the best decision * Low demand [0.70) $70,000 Do not expand 590,000 Small expansion Large expansion High demand [0.30] Expand $135,000 Low demand (0.70 -$40,000 High demand [0.30] $220,000

Giving the following decision tree what is the best expected value for the best decision * Low demand [0.70) $70,000 Do not expand 590,000 Small expansion Large expansion High demand [0.30] Expand $135,000 Low demand (0.70 -$40,000 High demand [0.30] $220,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Giving the following decision tree
what is the best expected value
for the best decision *
Low demand [0.70]
$70,000
Do not expand
$90,000
Small expansion
Large expansion
High demand (0.30]
Expand
$135,000
Low demand (0.70]
$40,000
High demand [0.30]
$220,000

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