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Q.6. Bhavisha has to decide whether to build a new state-of-the-art processing facility. If the new facility works, the company could realise a profit of

Q.6. Bhavisha has to decide whether to build a new state-of-the-art processing facility. If the new facility works, the company could realise a profit of 2000000. If it fails, they could lose 1500000. Bhavisha estimates a 55% chance that the new facility will fail. The other option is to build a pilot plant and then decide whether to build a complete facility. The pilot plant would cost 100000 to build. Bhavisha estimates a 70% chance that the pilot plant will work. If the pilot plant works, there is a 80% probability that the complete plant, if it is built, will also work. If the pilot plant does not work, there is only a 20% chance that the complete plant (if it is constructed) will work. Help Bhavisha by analysing this problem after constructing decision tree

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