=+14. Energy investment. An investment bank is thinking of investing in a start-up alternative energy company. They can become a major investor for $6M, a moderate investor for $3M, or a small investor for $1.5M. The worth of their investment in 12 months will depend on how the price of oil behaves between then and now. A financial analyst produces the following payoff table with the net worth of their investment (predicted worth - initial investment) as the payoff.

M23_SHAR8696_03_SE_C23.indd 853 14/07/14 8:05 AM 854 CHAPTER 23 Decision Making and Risk Price of Oil Substantially Higher About the Same Substantially Lower Action Major investment $5,000,000 $3,000,000 - +2,000,000 Moderate investment $2,500,000 $1,500,000 - +1,000,000 Small investment $1,000,000 $500,000 - +100,000 Construct a decision tree for this payoff table.