A businessman has two independent investments A and B available to him, but he lacks the capital

Question:

A businessman has two independent investments A and B available to him, but he lacks the capital to undertake both of them simultaneously. He can choose to take A first and then stop, or if A is successful then take B, or vice versa. The probability of success on A is 0.7, while for Bit is 0.4. Both investments require an initial capital outlay of Rs 2,000, and both return nothing if the venture is unsuccessful. Successful completion of A will return Rs 3,000 (over cost), successful completion of B will return Rs 5,000 (over cost). Draw the decision tree and determine the best strategy

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: