Question 5Your company has developed a new energy drink and you are trying to decide whether to sell the recipe, or make and distribute it yourself.A company will pay you $8 million for the recipe.If your company makes the drink itself, it will cost $7 million to build a factory and distribution network.Your analytics and marketing teams tell you there is a 10% chance the market response will be great, a 60% chance the market response will be decentwith gross earnings of $15 million, and a 30% chance the market response will be poor with gross earnings of $5 million.If the market response is great, there is a 60% chance the drink will be the new fad and you will make gross earnings of $70 million, a 30% chance thegross earnings will be $40 million, and a 10% chance the gross earnings will be $20 millionWhat is the expected value from the Perfect Information Tree Gust the perfect information tree. not EVP)Please write your answer in units of Smillions, and round to 2 decimal places. For example if the answer is 1.250.000. you enter it as 1.25

Decision analysis is a structured approach to decision making. Decision Making With Probabilities…

Answered: Your company has developed a new energy…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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