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Suppose that aa crop consultant estimates that there is a 20 percent chance of a major insect infestation, which could reduce your per-acre gross margin
Suppose that aa crop consultant estimates that there is a 20 percent chance of a major insect infestation, which could reduce your per-acre gross margin by $60. If no insect damage occurs, you expect to receive a gross margin of $120 per acre. Treatment for the insect is effective but cost $15 per acre. Show the possible results of treating in a decision tree and in a payoff matrix. What is the expected gross margin for each choice? What is the range between high and low outcomes for each choice
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