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Broncs Publishers (BP) is considering a manuscript for a new college textbook. The editor is familiar with the manuscript and estimates the textbook will be
Broncs Publishers (BP) is considering a manuscript for a new college textbook. The editor is familiar with the manuscript and estimates the textbook will be successful with 65% probability. If successful, a profit of $750,000 will be realized. However, if it is unsuccessful, a loss of $250,000 loss will occur. The editor is also considering sending the manuscript out for a review. A review process results in either a favorable (F) or unfavorable (U) evaluation of the manuscript. Past experience with similar textbooks suggests that probability of a favorable review is 70%. The decision tree for this decision is given below. Determine the best decision for the editor if the objective is to maximize profit. SHOW YOUR WORK AND DECISIONS WITH REFERENCE TO NUMBERED NODES. Broncs Publishers (BP) is considering a manuscript for a new college textbook. The editor is familiar with the manuscript and estimates the textbook will be successful with 65% probability. If successful, a profit of $750,000 will be realized. However, if it is unsuccessful, a loss of $250,000 loss will occur. The editor is also considering sending the manuscript out for a review. A review process results in either a favorable (F) or unfavorable (U) evaluation of the manuscript. Past experience with similar textbooks suggests that probability of a favorable review is 70%. The decision tree for this decision is given below. Determine the best decision for the editor if the objective is to maximize profit. SHOW YOUR WORK AND DECISIONS WITH REFERENCE TO NUMBERED NODES
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