be company's plans. Toronto West Development Corporation managers are thinking about hiring Mimico Research Group (MRG) to conduct a market research. Then, MRG would come up with either favorable report predicting strong demand, or unfavorable report predicting weak demand on the real estate market. It is known that in 90% of cases when strong demand took place, MRG ha predicted it correctly. It is also known that in 86% of cases when weak demand ccurred, MRG had predicted it correctly. MRG specialists need a month to complete heir analysis, and they have to use expensive software, supercomputers, and hire additional computer and logistics analysts. a) Suppose that you need to construct a revised decision tree. First, fill in the llowing revised probability tables for the favorable and unfavorable reports Round joint probability values, P(Favorable), P(Unfavorable), and the posterior probability values to 4 decimals places. Probability Revisions given a Favorable Report State Prior Conditional Probability Posterior Probability Nature Probability P(Fav./State of Nature) Joint Probability P(State of Nature/Fav.) Strong 0.66 Weak 0.34 P(Favorable) 1.0800 Probability Revisions given an Unfavorable Report State Prior Conditional Probability Joint Probability Posterior Probability Nature Probability P(Unfav./State of Nature) P(State of Nature/Unfav.) Strong 0.66 Weak 0.34 P( Unfavorable) 1.0000 (e) Using the revised probability tables, please identify the revised/posterior probabilities which you are going to use in the revised decision tree: keep 4 decimal places in the following answers. P( Strong demand | Favorable report ) = ( Weak demand | Favorable report) = P( Strong demad | Unfavorable report) = P( Weak demand | Unfavorable report) = f) Now you start constructing the revised decision tree. Select the correct sketch of he leftmost part of the revised decision tree based on the information above. OP(F) = 0.6416 , P(U) = 0.3584 F)-P(Favorable Report Favorable Report Hire the probabilities P(F) sing the revised Unfavorable Report probability tables. Use EMV of the optimal decision ecision tree from the Simple Decision Tree part of the solution . OP(F) = 0.9258 , P(U) = 0.8158 Hire Favorable Report High-Rise Condo Do not hire UP(Unfavorable R Hire ise ENV of the optin Unfavorable Report Do not hire include the whole imple Decision Tre Favorable Report Do not hire Mid-Rise Apartments Unfavorable Report Hire Favorable Report Hire Retirement Homes Unfavorable Report OP(Hire) = 0.9 , P(Do not hire) = 0.86 Favorable Report P(Hire) ranch use ENV of the Unfavorable Report the whole decision tree Favorable Report decision Tree part of Unfavorable Report OP(F) = 0.628 , P(U) = 0.3848 Favorable Report P(U)-P(Unfavorable Repor High-Rise Condo Unfavorable Report Ise EMV of the optimal include the whole Favorable Report of the solution. Hire (U)=P(Unfavorable Repor Unfavorable Report Mid-Rise Apartments "hire (F)=P(Favorable Report) Favorable Report (U)-PfUnfavorable Repor Unfavorable Report Retirement Homes Do not ONone of the above. (9) Construct the revised decision tree and answer the following questions. Round all EMV answers to 2 decimal places. . In case of favorable report, EMV(High-Rise Condo) EMV( Mid-Rise Apartments) = EMV( Retirement Homes) . In case of unfavorable report, EMV(High-Rise Condo) = EMV( Mid-Rise Apartments) = EMV( Retirement Homes) = . In the revised decision tree, there are the expected monetary values EMV(Hire) = EMV(Do not hire) = (h) Based on the revised decision tree formulate the optimal decision policy. Note that in each key word you have to use the scroll-down menu to select the correct option. If you recommend not hiring MRG, please select N/A in case of favorable/unfavorable report. Select an answer . Mimico Research Group. If their report is favorable, then choose the elect an answer project. If the report is unfavorable, then go ahead with the Select an answer ~ project. I) How much would Toronto West Development Corporation be willing to pay at most or the information about future economic conditions? If you recommend not hiring MRG, please enter zero in the answer cell. Keep 2 decimal places in the following answer. TWDC can pay up to (in $ millions) ) How efficient the MRG information would be? you recommend not hiring MRG, please enter zero in the answer cell. Round your answer to 1 decimal place. Efficiency =