Questions:

Sarah Chang is the owner of a small electronics company. In 6 months, a proposal is due for an electronic timing system for the next Olympic Games. For several years, Chang's company has been developing a new microprocessor, a critical component in a timing system that would be superior to any product currently on the market. However, progress in research and development has been slow, and Chang is unsure about whether herstaff can produce the microprocessor in time, if they succeed in developing the microprocessor (probability p1), there is an excellent chance (probability p2) that Chang's company will win the $1 million Olympic contract. If they do not, there is a small chance (probability p3) that she will still be able to win the same contract with an alternative, inferior timing system that has already been developed. If she continues the project, Chang must invest $200,000 in research and development. In addition, making a proposal (which she will decide whether to do after seeing whether the R&D is successful or not) requires developing a prototype timing system at an additional cost. This additional cost is $50,000 if R&D is successful (so that she can develop the new timing system), and it is $40,000 if R&D is unsuccessful (so that she needs to go with the older timing system). Finally, if Chang wins the contract, the finished product will cost an additional $150,000 to produce.

a. Develop a decision tree that can be used to solve Chang's problem. You can assume that she is using expected value (of her net profit) as a decision criterion. Build the tree so that she can enter any values for p1, p2, and p3 (in input cells) and automatically see her optimal EV and optimal strategy from the tree.

I'm having trouble in develop Chang's decision. Can you explain how do I find the decison and chance value? Thank you!