Create a decision tree to show outcomes

Assignment Help Project Management

Reference no: EM132475778 , Length: 2 pages

Buy vs. Lease Equipment Decision Tree

Build a decision tree to decide if your organization should purchase a brand-new technology or lease the technology.

The biggest concerns or risks with purchasing technology are the rapid changes that happen in technology and the low end-of-life value of technology. Therefore, there is a 40 percent chance that the leased equipment will have better contractual value at the end of the lease-period . Alternatively, there is an 85 percent chance that purchasing new technology will have a lower-than-expected value at the end of the project life. The cost for the technology, if leased, is $11,500, versus the cost of purchasing a new technology, which is $15,000.

Part 1. Use the information in the table below to decide whether you want to lease versus buy new technology.

Part 2. Create a decision tree to show outcomes for each decision node using the SilverDecisions website. Please note: while the SilverDecisions tool is intuitive, you can find a manual at the following site:

Part 3. Calculate expected value of each outcome and show your calculations (Probability X Impact).

Part 4. Export your decision tree as a png. file and save it on your computer.

Part 5. Explain the best option based on the outcome, and why.

Attachment:- Lease Equipment Decision Tree.rar

Reference no: EM132475778

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