The decision tree costs and benefits of present value, Basic Statistics

Question:

Imagine that your client, Hillside County Forest Preserve (HCFP), is considering how best to protect their natural lagoons.  They have asked for your help, and you have found the following/

  • If they do nothing, the lagoons are sure to deteriorate and have a societal cost of $100,000
  • If they enact an experimental new program, called Lagoon Preservation Project ("LPP"), then there is a 50% chance that it will be successful, yielding a societal benefit of $70,000. There is a 50% chance it will not be successful, causing further harm to the lagoons, yielding a societal cost of $150,000
  • Enacting LPP will cost $10,000

Assume all costs and benefits above are expressed in present values.

a.  Which option has the higher expected benefit to society? Show the decision tree that supports your answer.

b.  What would the likelihood of success of LPP need to be for enacting it to have the same Expected Value as not enacting it?

Posted Date: 2/16/2013 7:52:07 AM | Location : United States







Related Discussions:- The decision tree costs and benefits of present value, Assignment Help, Ask Question on The decision tree costs and benefits of present value, Get Answer, Expert's Help, The decision tree costs and benefits of present value Discussions

Write discussion on The decision tree costs and benefits of present value
Your posts are moderated
Related Questions
Three major Accounts and their Rules There are three major Records which are a) Personal Accounts b) Real Accounts c) Moderate Accounts Rule for Personal Account: Ch

how do you interpret the correlation on the basis of probable error

While the differences between IFRS and GAAP are reducing, there still are significant differences between the two. While the IFRS has been developed by the IASB (International A

can we polarize sunlight by the help of Polaroid disc?

Federal income tax Another part of paycheck accounting involves the staff's got earnings tax. A company is necessary to hold the got earnings tax that and personnel are expecte

Ask question #MinimumAgency revenues. An economic consultant was retained by a large employment agency in a metropolitan area to develop a regression model for predicting monthly a

The 70-m microwave transmission tower

The ABC Company''s old equipment for making subassemblies is worn out. The company is considering two alternatives: a) Completely replacing the old equipment with new equipment b)

A second file on DocDepot named Marks.mtp contains the final exam percentages of students in ADM2304A in the Fall 2011 semester. Assume that the class can be considered a random sa

will the ogive curve eventually decrease?