Solution-Create a decision tree in excel to solve the

Create a decision tree in excel to solve the problem

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Question 1: A real estate investor must decide between two possible investments options: an apartment building and an office building. The profit associated with each decision depends on future economic conditions as shown in the following payoff table. Profit ($ thousands) Strong Weak Apartment 80 40 Office 164 -36 The investor thinks that there is 65% chance that strong economic conditions will prevail in the future. However, the investor is considering hiring an analyst to determine future economic conditions. If the report is favorable then the probability of strong economic conditions is 80%. If the report is unfavorable then the probability of strong economic conditions is 30%. There is also a 70% chance of obtaining a favorable report. Create a decision tree in Excel to solve the problem.

Reference no: EM132650107

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Create a decision tree in excel to solve the problem

Reference no: EM132650107

Reference no: EM132650107

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