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I am needing help confirming the answers to questions a-d. I have built a table and derived the outcomes, I would like support confirming the
I am needing help confirming the answers to questions a-d. I have built a table and derived the outcomes, I would like support confirming the answers with a thorough walkthrough of how you got the answer provided.
A local administrator is planning to address deterioration to a portion of a building that houses urgent care operations. A contractor has provided her with four alternatives: build a new building, major structural renovation, moderate renovation, and minor renovation Further, based ontheir past experience, the contractor anticipates that the weather can greatly affect the cost estimates of the project Previous years indicate there is a 40% chance of good weather, 35% chance of consistently wet periods, and a 25% of damaging weather during the planned construction phase. As a result, building a newr building will cost $215,000, $255,000, or $316,000 in good, wet, and damaging weather, respectively. Major structural renovations will cost $120,000, $ 145 ,5 00, or $214,000 in good, wet, and damaging weather, respectively. Moderate renovation will cost $90,000, $9 8,000, or $ 123,000 in good, wet, and damaging weather, respectively. The minor renovation option will cost $56,000, $75,000, or $119,000 in good, wet, and damaging weather, respectively. a) Build a payoH table for the possible renovation options and weather outcomes. 1)) Develop a decision tree for the decision. Include cost outcomes, probabilities, and EIVIIV at each node. c) Using ENIV, which renovation should be chosen? d) Calculate and interpret the expected value of perfect informationStep by Step Solution
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