Given the following decision tree, perform the tasks listed below 

1. Simulate the route through the test market and produce results for twenty simulations, calculating the payoff in each case.

2.  Calculate the probability that the company should abandon the project without going through the test market, i.e. the probability that a loss will be made on the project if the test market is conducted.

3.  Calculate the expected return from the simulated payoff and compare it with the expected payoff based on the decision tree.

4.  Advise the company on their choices.

Posted Date: 3/11/2013 3:31:13 AM | Location : United States

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