Draw decision tree for kring and select her best alternative

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Kring Acosta, after migrating to the United States, is considering opening a new grocery store in town. She is evaluating three possible location sites:

downtown, the mall, and out at the busy traffic circle.

Kring calculated the value of successful stores at these locations as follows:

downtown, $350,000;

the mall, $400,000;

the circle, $500,000.

She calculated her losses if unsuccessful to be $200,000 at either downtown or the mall and $300,000 at the circle. Kring figures her chance of success to be 50% downtown, 60% at the mall, and 75% at the traffic circle.

Required: Draw a decision tree for Kring and select her best alternative.

Reference no: EM131168338

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