QUESTION 6 A semiconductor manufacturer is investigating the possibility of producing and marketing a microprocessor. Undertaking this project will require either purchasing new software or training the operators. The market could be favourable or unfavourable and the company has the option of not developing a new product. With favourable acceptance by the market, sales would be 25,000 processors selling for $100 each. With unfavourable acceptance, sales would be only 8000 processors selling for $100 each. The cost of the software is $500,000 but training the operators is only $375,000. However, manufacturing costs would drop from $50 each when manufacturing without the software to $40 when manufacturing with the software. The probability of favourable acceptance is 0.35 and the probability of unfavourable acceptance is 0.65 Sketch the decision tree for this situation (2 marks) (a) ( mark) (b) What is the Net Benefit/Net Loss for each of the possible outcomes? (c) What is the expected monetary value for each option and the recommendation for the company? (2 marks) QUESTION 6 A semiconductor manufacturer is investigating the possibility of producing and marketing a microprocessor. Undertaking this project will require either purchasing new software or training the operators. The market could be favourable or unfavourable and the company has the option of not developing a new product. With favourable acceptance by the market, sales would be 25,000 processors selling for $100 each. With unfavourable acceptance, sales would be only 8000 processors selling for $100 each. The cost of the software is $500,000 but training the operators is only $375,000. However, manufacturing costs would drop from $50 each when manufacturing without the software to $40 when manufacturing with the software. The probability of favourable acceptance is 0.35 and the probability of unfavourable acceptance is 0.65 Sketch the decision tree for this situation (2 marks) (a) ( mark) (b) What is the Net Benefit/Net Loss for each of the possible outcomes? (c) What is the expected monetary value for each option and the recommendation for the company? (2 marks)