A small business… Draw a decision tree to help the business decide which building… Maths

Goodg40Poor18-10response to poor customer confidence due to the current economic climate. The following tablegives the expected profits for different discounts and market confidence, with all profits given inc) Calculate an opportunity loss table and use it to advise the company using the minimax decisionA small business wants to invest in some property. There are three options that they can chooseincome from each option will be as follows. The business advisor at the bank considers that thechance of the market remaining good is 0.4 and the chance of the market becoming poor is 0.6.b) Using the information given above, recommend which course of action Buildings’R’Us shouldfrom. They can either buy a local shop for E60,000, a flat for E50,000 or some office space forThe estate agent, Buildings’R’Us, has to decide whether to discount its sales package inresearch and having discussions with the estate agent, Buildings’R’Us, they estimate that theE70,000. They do not have enough money to buy more than one building. After doing somea) Draw a decision tree to help the business decide which building to buy. Use appropriateNeutralState of the marketCondition of Marketsymbols, calculate expected values and advise the company on the best option.LO50Good200gBadtake in order to maximise profit with the aid of:Estimated rental income in E1,000SEMINAR HAN(i) The maximax decision rulengLarge Discount(ii) The maximin decision ruleSmall discountNo DiscountOfficesShopFlatQuestion ThreeE1000s.rule.

 
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