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A joint venture project has two investment options 1 and 2. Each investment has two revenue streams with different probabilities, so in total there are
A joint venture project has two investment options 1 and 2. Each investment has two revenue streams with different probabilities, so in total there are four scenarios to compare: Invest 1 with Revenue 1.1 Invest 1 with Revenue 1.2 Invest 2 with Revenue 2.1 Invest 2 with Revenue 2.2 Invest 1 $500k Revenue 1.1 30% $3,000k Revenue 1.2 $1,000k Revenue for both 1.1 & 1.2 70% $2,000k Invest 2 $1,000k Revenue for both 2.1 & 2.2 40% $1,000k Revenue 2.1 60% $2,000k Revenue 2.2 $4,000k Based on a decision tree analysis, which of the four scenarios is the least favorable? Hint: Calculate the expected result for each of the four paths and compare. Group of answer choices Invest 1 with Revenue 1.1 Invest 1 with Revenue 1.2 Invest 2 with Revenue 2.1 Invest 2 with Revenue 2.2
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