decision tree analysis with emv
TRANSCRIPT
Initial Question OptionsOutcome
probabilitiesOutcome +/- Expected Value
Project 1
Project 2
Project 3
0.25
0.3
0.45
0.2
0.4
0.4
0.2
0.35
0.45
$60000
$50000
$65000
$75000
$35000
$70000
$150000
$75000
$80000
$15000
$15000
-$29250
$15000
$14000
-$28000
$30000
$26250
-$36000
$750
$1000
$20250
What project should we
select?
Initial Question OptionsOutcome
probabilitiesOutcome +/- Expected Value
Project 1
Project 2
Project 3
0.2
0.4
0.4
0.15
0.55
0.3
0.1
0.2
0.7
$60000
$50000
$65000
$75000
$35000
$70000
$150000
$75000
$80000
$12000
$20000
-$26000
$11250
$19250
-$21000
$15000
$15000
-$56000
$6000
$9500
-$26000
What project should we
select?