Shown below is the probability tree associated with a choice to either expand or not expand. A square is a decision node; a circle is a chance (probability) node.Are “sales” independent of the expansion decision? Are “costs” independent of the expansion decision? Are “costs” independent of “sales?” Are revenues independent of the expansion decision? ExpansionSalesCostsRevenueSales - CostsHigh200000 - 100000 = 100000High.5LowExpand200000 - 50000 = 150000High100000 - 100000 =Low.5Low100000 - 50000 = 50000High150000 - 75000 = 75000High3Low150000 - 25000 = 1250001.3pon't ExpandHigh50000 - 75000 = -250007 Low.7\ Low50000 - 25000 = 25000

Given: The probability in which the tree being associated based on expanding it includes the square…

Answered: Shown below is the probability tree…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Shown below is the probability tree associated with a choice to either expand or not expand. A square is a decision node; a circle is a chance (probability) node.

Are “sales” independent of the expansion decision?

Are “costs” independent of the expansion decision?

Are “costs” independent of “sales?”

Are revenues independent of the expansion decision?

Expansion
Sales
Costs
Revenue
Sales - Costs
High
200000 - 100000 = 100000
High
.5
Low
Expand
200000 - 50000 = 150000
High
100000 - 100000 =
Low
.5
Low
100000 - 50000 = 50000
High
150000 - 75000 = 75000
High
3
Low
150000 - 25000 = 125000
1.3
pon't Expand
High
50000 - 75000 = -25000
7 Low
.7\ Low
50000 - 25000 = 25000

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