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White Castle is considering expanding to San Jose. If SJ restaurant is successful, they will make $9 million. Otherwise, they will lose $4 million. They
White Castle is considering expanding to San Jose. If SJ restaurant is successful, they will make $9 million. Otherwise, they will lose $4 million. They estimate there's a 30% chance they will be successful. White Castle could hire a market research firm to do a more indepth test of the San Jose market. This will give them a better idea of their chance of success. The market research firm charges $1.2 million. The test will come back positive or negative. There's a 64% chance it will come back negative. If the result is negative, White Castle's chance of success will be only 4.7%. a) What should White Castle do? Create a decision tree to help identify the optimal decision strategy
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