Ahmed Saif is the manager of a large agriculture firm that owns 100,000 acres in the new valley project of Toshka in the Western desert of Egypt. He now needs to decide on which one of three crops to grow during the upcoming summer season. Ahmed has obtained the following estimates of expected net income per acre for each crop under various weather conditions.

CROP EXPECTED INCOME,

(THOUSANDS OF LE PER ACRE)

DRY DAMP Sugarcane -20 35 Cotton -15 40 Maize -10 25 Weather Probability 0.7 0.3

a) Construct a decision tree for the problem.

b) Determine the best alternative using the expected monetary value (EMV). What is the toal expected net income for the company?

c) What is the expected value of perfect information (EVPI)?