Risk analysis and the value of informationsue reynolds has

Assignment Help Project Management

Reference no: EM13363420

Risk Analysis and the Value of Information

Sue Reynolds has to decide if she should get information (at cost of $300,000) to invest in retail store. if she gets the information, there is a 0.45 probability that the information will be favorable and a 0.55 probability that the information will not be favorable.If the information is favorable, there is a 0.9 probability that the store will be a success.If the information is not favorable the probability of a successful store is only 0.2 without any information,sue estimates that the probability of a successful store will be 0.6 A successful store will give a return of $120,000. if the store is built but is not successful,Sue will see a loss of $90,000. of course, she could always decide not to build the retail store.

1) construct a decision tree.

2) what do you recommend?

Reference no: EM13363420

Questions Cloud

What can the project manager do in case like thispurpose to : what can the project manager do in case like this?purpose to understand the core values of apf. a major part of apf is

Strategic considerations to justify a projectmany financial : strategic considerations to justify a projectmany financial analysts are very skeptical of the use of strategic

Project managment pmbok and five phases for lrh : project managment pmbok and five phases for lrh productsscenarioyour company lrh products is about to attend a major

Question 1 a the density of mercury is 13595 g cm-3 what : question 1 a the density of mercury is 13.595 g cm-3 . what will be this value in si units?b give the si units and

Risk analysis and the value of informationsue reynolds has : risk analysis and the value of informationsue reynolds has to decide if she should get information at cost of 300000 to

Project evaluation using the marryou just purchased a used : project evaluation using the marr.you just purchased a used car for 3000 and being enrolled in this course you are

Assessing project worth through present and annual worthyou : assessing project worth through present and annual worthyou are considering two mutually exclusive alternatives with

1you are the assistant to the cfo of abc inc divisions a b : 1you are the assistant to the cfo of abc inc. divisions a b and c have ach proposed projects that require a 1000000

Project managementdo you think by informing the customer : project managementdo you think by informing the customer that you need more time for a project or the quality of the

User Account

All Pages