What is the EMV of applying for a grant

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Question - The FIU Marching Band is out of money.  It hurts when halftime music is provided by the band of the other team at a home game.  They have two choices: apply for federal grant money or do a major fundraiser. They cannot do both.  The band's manager  believes he has a 90% chance that he will win a grant of $25,000 if he submits the grant application. Grants in this category are for a fixed amount, so if he loses the grant, he'll have no money to run the band.  Based on his past fundraising experience, he estimates that if he runs a local fundraiser, he has a 30% chance of raising $30,000 and 70% chance of raising $20,000.  Create a decision tree to help him determine which decision has the higher EMV.

a: What is the EMV of applying for a grant?

b: What is the EMV of doing a major fundraiser?

c: What should the band do?

Reference no: EM131780006

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