Answer this 3 part question, *especially part 3:

1. You have finished writing your book and a book publisher is offering you $200,000 to buy it. If you sell to the publisher, you will receive the money and will have no further revenue from the book. Alternatively, you can self-publish your book. The costs to self-publish are $225,000. Each self-published book you sell will make $10 in profit. Your agent tells you there is a 30% chance your book will be a best-seller and you will sell 80,000 copies. Otherwise, your book will flop, selling 30,000 copies. Draw a decision tree for this scenario.

2.An analytics firm tells you they can perfectly predict how your book will do, and you can use this information to make your decision to self-publish or sell to the publisher. What is the value of this information?

3. Now assume perfect information is not available. You hire booksellers analytics to predict the success of your book. BookSellers Analytics tells you that when your book is a best seller, they predict it as a best seller 70% of the time. And when your book flops, they predict it flopping 100% of the time. How much money should you be willing to pay for BestSellers' prediction? (Use a decision tree).