Please enable JavaScript.
Coggle requires JavaScript to display documents.
Decision node - Coggle Diagram
Decision node
State of nature node 1: Small Shop
Good Probability: .2
75,000 x .2=15,000
EMV---15,000-12,000=3000
average Probability: .5
25,000 x .5=12,500
EMV---12,500-12000=500
Bad Probability:.3
-40,000 x .3=--12,000
State of nature node 3: No Shop at all
EMV=0
State of nature node 2: Medium sized Shop
Bad Probability:.3
-60,000 x .3=-18,000
Good Probability: .2
100,000 x .20=20,000
EMV=20,000-18,000=2,000
Average Probability: .5
35,000 x .50=17,500
EMV=17,500-18,000=-500