business analytics

Read the scenario below carefully and completely and draw the decision tree for this problem. Show all decision nodes, chance nodes, payoffs, and the probabilities of different states of nature happening if it is given to you. You DO NOT have to calculate any probabilities or solve this problem to find the best decision or calculate payoffs. The Metal Discovery Group (MDG) is a company set up to conduct geological explorations of parcels of land in order to ascertain whether significant metal deposits (worthy of further commercial exploitation) are present or not. Currently, MDG has an option to purchase a parcel of land for $3 million. If MDG purchases this parcel of land then it will conduct a geological exploration of the land. Past experience indicates that, for the type of parcel of land under consideration, geological explorations cost approximately $1 million and yield significant metal deposits as follows: . manganese 1% chance . gold 0.6% chance . Platinum 0.2% chance Only one of these three metals is ever found (if at all), i.e. there is no chance of finding two or more of these metals and no chance of finding any other metal. If manganese is found then the parcel of land can be sold for $30 million, if gold is found then the parcel of land can be sold for $250 million and if silver is found the parcel of land can be sold for $100 million. MDG can, if they wish, pay $750,000 for the right to conduct a three-day test exploration before deciding whether to purchase the parcel of land or not. Such three-day test explorations can only give a preliminary indication of whether significant metal deposits are present or not and past experience indicates that three-day test explorations cost $250,000 and indicate that significant metal deposits are present 50% of the time. If the three-day test exploration indicates significant metal deposits then the chances of finding manganese, gold and platinum increase to 3%, 2% and 1% respectively. If the three-day test exploration fails to indicate significant metal deposits then the chances of finding manganese, gold and platinum decrease to 0.75%, 0.04% and 0.175 % respectively. Read the scenario below carefully and completely and draw the decision tree for this problem. Show all decision nodes, chance nodes, payoffs, and the probabilities of different states of nature happening if it is given to you. You DO NOT have to calculate any probabilities or solve this problem to find the best decision or calculate payoffs. The Metal Discovery Group (MDG) is a company set up to conduct geological explorations of parcels of land in order to ascertain whether significant metal deposits (worthy of further commercial exploitation) are present or not. Currently, MDG has an option to purchase a parcel of land for $3 million. If MDG purchases this parcel of land then it will conduct a geological exploration of the land. Past experience indicates that, for the type of parcel of land under consideration, geological explorations cost approximately $1 million and yield significant metal deposits as follows: . manganese 1% chance . gold 0.6% chance . Platinum 0.2% chance Only one of these three metals is ever found (if at all), i.e. there is no chance of finding two or more of these metals and no chance of finding any other metal. If manganese is found then the parcel of land can be sold for $30 million, if gold is found then the parcel of land can be sold for $250 million and if silver is found the parcel of land can be sold for $100 million. MDG can, if they wish, pay $750,000 for the right to conduct a three-day test exploration before deciding whether to purchase the parcel of land or not. Such three-day test explorations can only give a preliminary indication of whether significant metal deposits are present or not and past experience indicates that three-day test explorations cost $250,000 and indicate that significant metal deposits are present 50% of the time. If the three-day test exploration indicates significant metal deposits then the chances of finding manganese, gold and platinum increase to 3%, 2% and 1% respectively. If the three-day test exploration fails to indicate significant metal deposits then the chances of finding manganese, gold and platinum decrease to 0.75%, 0.04% and 0.175 % respectively