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Please solve, clearly and have steps present. Q1: Netflix is considering whether they should produce another Turkish series. The past data shows that 25% of
Please solve, clearly and have steps present.
Q1: Netflix is considering whether they should produce another Turkish series. The past data shows that 25% of the Turkish series produced turn out to be (H) its and 75% turn out to be (F)lops. Usually, Nettlix earns an average of $400,000 from a hit show or losses an average of $150,000 on a flop. Use a decision tree to calculate the EMV and EVPI of this investment, What will be your decistion (s)? Q2: Nil has inherited $100,000 and she deeided to invest this mony for a year. She is deciding between two investment options: - Option 1: Investing into a savings accoumt that pays at the end of the year with the interest rate of 12% compounded monthly. - Option 2: Investing in gold. The profit gained from this investment depends highly on the market conditions. We have the following predictions for the next year - With 0.2 probability, next year market will go through a large rise. In this cate, the revene obtained from this investment will be at high (H) level, in the amount of $160,000, earned at the end of one year. - With 0.5 probability, nest year market will go through is wabll ribe, which resulte is metium (M) level of revrues, in the amount of $115,000 ot the end of cone war. - With 03 pobahility, next year maskit will will go through a fall, roulting in lom (t) Wevel of reverem, in the amomit of 560,000 at the end of one yeir Use a declsion tree to calculale the EMV and EVPI of this investment What will be your decision(s) Step by Step Solution
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