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Question 13 5 pts A product is being considered and the market for the item may be Favorable or Unfavorable, the company must decide if

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Question 13 5 pts A product is being considered and the market for the item may be Favorable or Unfavorable, the company must decide if it is worth having the product reviewed by professionals. If the product is successful the profit is $750,000 if the product is a failure then a negative payoff of $-250,000 results. Probability of Favorable = 0.80 What is the expected value at node 2? Success 750 Accept 0.75 Failure 0.25 -250 . Favorable 4 Success 0.75 0 Reject Failure 0.25 Review 2 Success 02417 750 Accept 8 Failure 0.58 250 Unfavorable 5 Success 0.417 Reject 750 Accept 0.417 8 Failure 0.583 -250 Unfavorable 5 Success 0.417 0 Reject 1 Failure 0.583 0 Success 0.65 750 Accept (10 Failure 0.35 -250 Do Not Review 3 Success 0.65 0 Reject 11 Failure 0.35 0 $500 $487.5 . 5433.40 5400

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