Questior The Bornova Innovation Company has three emerging technology options to invest. The vestment options and market conditions for these technologies are given below. Based on this information; Investment Options Market Conditions Investment Revenue Emerging Technology Cost Demand Forecasting Probability (1000TL) (1000TL) Strong 0.6 9000 A 8000 Weak 0.4 6000 Strong 0.7 8000 B. 6500 Weak 0.3 5000 Strong 0.8 6000 5000 Weak 0.2 3000 a. Draw the decision tree b. Find the expected monetary value (EMV) of each options c. Which technology option should be selected? Why?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Bornova Innovation Company has three emerging technology options to
invest. The mvestment options and market conditions for these technologies are given below. Based
on this information;
Investment Options
Market Conditions
Investment
Revenue
Emerging Technology
Cost
Demand Forecasting Probability
(1000TL)
(1000TL)
Strong
0.6
9000
A
8000
Weak
0.4
6000
Strong
0.7
8000
В
6500
Weak
0.3
5000
Strong
0.8
6000
5000
Weak
0.2
3000
a. Draw the decision tree,
b. Find the expected monetary value (EMV) of each options
c. Which technology option should be selected? Why?
Transcribed Image Text:Questior The Bornova Innovation Company has three emerging technology options to invest. The mvestment options and market conditions for these technologies are given below. Based on this information; Investment Options Market Conditions Investment Revenue Emerging Technology Cost Demand Forecasting Probability (1000TL) (1000TL) Strong 0.6 9000 A 8000 Weak 0.4 6000 Strong 0.7 8000 В 6500 Weak 0.3 5000 Strong 0.8 6000 5000 Weak 0.2 3000 a. Draw the decision tree, b. Find the expected monetary value (EMV) of each options c. Which technology option should be selected? Why?
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