Solving problem using decision tree analysis

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Reference no: EM1321943

Q1) Jay Seago is suing manufacture of his car for $3.5 million because of defect that he believes caused him to have accident. Accident kept him out of work for year. Company has offered him settlement of $700,000, of which Jay would get $600,000 after attorneys' fees. His attorney has advised him that he has 50% chance of winning his case. If he loses, he will acquire attorneys' fees and court costs of $75,000. If he wins, he is not guarantee of his full requested settlement. His attorney thinks that there is a 50% chance he could get full settlement, in which case Jay would realize $2 million after his attorney takes her cut, and 50% chance that jury will award him lesser amount of $1 million, of which Jay would get $500,000. Using decision tree analysis, decide whether Jay must proceed with his law suit against manufacturer.

Reference no: EM1321943

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