Part 3 of 3 – Part 3 A group o

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January 18th, 2023

Part 3 of 3 – Part 3

A group of medical professionals is considering the constructionof a private clinic. If the medical demand is high (i.e., there isa favorable market for the clinic), the physicians could realize anet profit of $100,000. If the market is not favorable, they couldlose $40,000. Of course, they don’t have to proceed at all, inwhich case there is no cost. In the absence of any market data, thebest the physicians can guess is that there is a 50–50 chance theclinic will be successful.

Question 9 of 9

20.0 Points

Construct a decision tree by fill-in the blanks below in referenceto the following chart.The decision choice at Decision 1 is______ and that at Decision 2is _______ Event 1 is _____ and Event 2 is _______ .The probability for Prob1 is _______ and that for Prob2 is ______.Payoff 1 is ______ and Payoff 2 is _____ .EMV 1 is ______ and EMV 2 is _____ .

Answer:

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