5 We are thinking of filming the Don Harnett story. We know that if the film is a flop, we will lose $4 million, and if the film is a success, we will earn $15 million. Beforehand, we believe that there is a 10% chance that the Don Harnett story will be a hit. Before filming, we have the option of paying the noted movie critic Roger Alert $1 million for his view of the film. In the past, Alert has predicted 60% of all actual hits to be hits and 90% of all actual flops to be flops.

We want to maximize our expected profits. Use a decision tree to determine our best strategy. What is EVSI? What is EVPI?