Wilshaw can run a survey to test market reaction with


Wilshaw Associates is considering launching an entirely new service. If the market reaction to this service is good (which has a probability of 0.2) they will make $30,000 a month; if market reaction is medium (with probability 0.5) they will make $10,000; and if reaction is poor (with probability 0.3) they will lose $15,000 a month. Wilshaw can run a survey to test market reaction with results A, B or C. Experience suggests that the reliability of such surveys is described by the following matrix of P(A/good), P(A/medium), etc. Use a decision tree to find the most that Wilshaw should pay for this survey.

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Finance Basics: Wilshaw can run a survey to test market reaction with
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