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help me please Mrs. Phang has a premise at Taman Melati. She intends to utilize the premise by investing a business in either a tuition
help me please
Mrs. Phang has a premise at Taman Melati. She intends to utilize the premise by investing a business in either a tuition center or a restaurant. She also has the option of not proceed with her plan. If the market is favourable, she will earn a profit of RM50,000 if she invests in tuition center and RM80,000 if she invests in restaurant. However under unfavourable market, she would lose RM30,000 with tuition center and RM45,000 with restaurant. There is a 60% chance that the market is favourable. Mrs. Phang has a choice to obtain additional information from the market research analyst which costs her RM10,000 and the probability that the result will be positive is 0.7. A positive result from the research will increase the probability of a favourable market to 0.8. However, a negative result from the research will decrease the probability of a favourable market to 0.3. a) Construct a decision tree for the above situation. (8 marks) b) Calculate the expected monetary values at each node. (4 marks) c) Determine the best decision that Mrs. Phang should make. (2 marks) d) Calculate the expected value of sample information. Explain the result. (3 marks) e) If the cost of gathering additional information is reduced to RM3,000, discover whether Mrs. Phang should remain with his decision in partc). (3 marks Mrs. Phang has a premise at Taman Melati. She intends to utilize the premise by investing a business in either a tuition center or a restaurant. She also has the option of not proceed with her plan. If the market is favourable, she will earn a profit of RM50,000 if she invests in tuition center and RM80,000 if she invests in restaurant. However under unfavourable market, she would lose RM30,000 with tuition center and RM45,000 with restaurant. There is a 60% chance that the market is favourable. Mrs. Phang has a choice to obtain additional information from the market research analyst which costs her RM10,000 and the probability that the result will be positive is 0.7. A positive result from the research will increase the probability of a favourable market to 0.8. However, a negative result from the research will decrease the probability of a favourable market to 0.3. a) Construct a decision tree for the above situation. (8 marks) b) Calculate the expected monetary values at each node. (4 marks) c) Determine the best decision that Mrs. Phang should make. (2 marks) d) Calculate the expected value of sample information. Explain the result. (3 marks) e) If the cost of gathering additional information is reduced to RM3,000, discover whether Mrs. Phang should remain with his decision in partc). (3 marksStep by Step Solution
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