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You are asked to choose between two projects A or B based on the highest gain (ory the lowest loss). A will cost U.S. $650,000
You are asked to choose between two projects A or B based on the highest gain (ory the lowest loss). A will cost U.S. $650,000 and B will cost U.S. $467,000. There is al 56% chance that project A will be successful, which will result in a gain of U.S. $1,800,000. If project A fails, there will be a loss of U.S. $900,000. There is a 67% project B will be successful, and that will result in a U.S. $950,000 gain. If Project BV fails there will be a loss of U.S. $670,000. Based on this information, what is the value of the best alternative? Based on above information prepare the decision tree. Ensure you indicate the option you will opt in this case scenario. (3 Mark)
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