1. You are deciding between two different airlines for an upcoming trip. Airline 1 will cost you $300 round trip. Airline 2 will cost you $400 for the same trip. Airline 1 has a terrible track record though when it comes to on time flights. There is a 80% chance that your flight will be delayed on Airline 1 and it will cost you another $200 to rebook your flight to a different one. There is only 10% chance Airline 2 will have a major delay, but they have a more stringent rebooking policy and it will cost you $400 to rebook.

1. Draw the decision tree (3 points)

2. What is the total cost of Airline 1? (3 points)

3. What is the total cost of Airline 2? (3 points)

4. Which Airline should you choose and why? (3 points)

5. What is the downside of this decision tree? (3 points)

6. If $700 is your absolute most you are willing to spend on a flight does this change your decision? Explain. (2 points)