Reference no: EM132966955
Question - Juan had a small car accident, fortunately he had his vehicle insured so I made the decision to go to the company and make the insurance effective.
After an investigation, the insurer offers Juan compensation for an accident of $2,100,000, but Juan has doubts regarding the amount since he considers it very low, so you are analyzing whether to go to trial.
If he doesn't accept the offer and decides to go to trial, Juan can get $ 1,850,000, $ 4,150,000, or $ 5,800,000 compensation, according to the allegations that the judge considers acceptable.
If Juan loses the lawsuit, Juan must pay the costs of $ 300,000.
There is a 70% probability of winning the trial, in this case 50% obtain the most compensation low, 30% obtain an intermediate compensation and the rest obtain the highest compensation.
Required -
a) Make the decision tree.
b) Determine what decision Juan should make, justify.
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