Draw a tree consider the following situation diagram it as


Draw a Tree. Consider the following situation, diagram it as a decision tree, and select the alternative that leads to the most preferred outcome: Kendra has received two job offers, one for $70,000 per year from Raytheon and the other from Quantum Dots, a startup company. She believes she can keep the Raytheon job for several years, but a Quantum Dots, she may make as little as $20,000 before the company fails, or she might make $20,000 per year for five years, until they go public, and then earn $8 million from stock options. She assesses the probabilities as follows: 0.1 probability of the best scenario, 0.5 probability of earning $20,000 for 5 years then nothing, and 0.4 probability of earning $20,000 for 1 year, then being laid off. Kendra has a 15% discount rate and a $50,000 risk tolerance. Do a six year analysis and advise Kendra – which job should she take?

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Operation Management: Draw a tree consider the following situation diagram it as
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