Question
The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. She
The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. She feels that script #1 has a 70% chance of earning $100 million over the long run, but a 30% chance of losing $20 million. If this movie is successful, then a sequel could also be produced, with an 80% chance of earning $50 million, but a 20% chance of losing $10 million. What is the expected payoff from selecting script #1? (Suggestion: Use Decision Tree concept to solve this problem).
Group of answer choices
A) $150 million
B) $90.6 million
C) $84 million
D) $72 million
E) $60 million
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