Determine the price of a ticket

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Reference no: EM131374932

See given Problem. Determine the price of a ticket so that not buying a ticket is the preferred option and determine the chance of winning so that not buying a ticket is the preferred option.

Problem :
Alega City Hospital is selling lottery tickets. All proceeds go to its cancer research program. Each ticket costs $100, but the campaign catchphrase promises a 1-in-1000 chance of winning the first prize. The first prize is a "dream" house, which is worth $250 000. On the basis of decision tree analysis, is buying a ticket worthwhile?

Reference no: EM131374932

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